Capital markets watchdog Sebi today ordered Golden Heaven Agro Project India and its directors to refund the money, along with an interest of 15 per cent per annum, which they had fraudulently raised from public.
Besides, the company and its directors have been prohibited from the capital markets for four years.
Securities and Exchange Board of India (Sebi) has prima facie found that Golden Heaven was engaged in fund mobilising activity from the public, through Redeemable Preference Shares (RPS) without complying with the public issue norms.
It noted that Golden Heaven had come out with an offer of RPS amounting to Rs 90 lakh in February, 2012, while as per the details forwarded by the Economic Offences Investigation Cell, the firm had collected Rs 41.25 lakh by issuing RPS to at least 53 investors.
Under the norms, the firm was required to list its securities on the recognised bourse as the shares were issued to more than 50 persons. It was also required to file a prospectus, among other things, which it failed to do.
In a final order passed today, Sebi said Golden Heaven and its directors will have to refund the money garnered by it via the issuance of RPS to investors along with "an interest of 15 per cent per annum compounded at half yearly intervals, from the date when the repayments became due to the investors till the date of actual payment. "
After completing the repayments, the company will have to file a report in this regard with Sebi within three months.
The regulator restrained the company and its directors from buying, selling or otherwise dealing in the securities market "till the expiry of four years from the date of completion of refunds to investors."
Also, they have been asked to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.
The directions would come into force with immediate effect.
Non-compliance of the order would make Sebi register a case with the state government or police against them for fraud, cheating and misappropriation of public funds.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.
Earlier, in an interim order passed in March last year, Sebi had put several restrictions on the company. The interim order came following a complaint received by Sebi in April 2014 alleging that the company had raised funds from the public and had failed to pay the amount due to its investors.
