Capital markets regulator Sebi today ordered Kolkata-based GSHP Realtech to refund Rs 2.64 crore collected from investors "with immediate effect."
A probe by Securities and Exchange Board of India (Sebi) found that GSHP Realtech had raised funds from public by issuing Non-Convertible Redeemable Debentures or NCDs ostensibly by way of private placement without seeking approval of the market regulator as required.
Sebi said as the issue by these companies were made to 50 or more persons, the company was under a legal obligation to get listed on a stock exchange.
Among others, it was also mandatory for the firms to bring out a prospectus with respect to the public issue.
In an order passed today, Sebi has directed GSHP Realtech its promoter and present directors --Arun Kumar Singh, Raj Kumar Mondal and Mahesh Kumar Singh and its former directors --Dharampal Kumar Rawat and Sanjay Kumar Srivastava--to refund the money collected by the company through the issuance of NCDs with returns that were promised by the company to its investors.
In case of delay in making the repayments, they have been directed to return the money collected from its investors with an interest of 15 per cent per annum.
The companies have been asked to issue public notices detailing modalities for refund, including details of the investors within 15 days of the order.
The firm has also been restrained from accessing the securities market and this ban will continue till the expiry of four years from the date of final refund.
Besides, Sebi has barred debenture trustee GSHP Welfare and Development Trust from accessing the securities markets for four years.
These directions would come into force with immediate effect.
If the firm and its promoters/directors fail to comply with these directions, Sebi would make a reference to the State Government/Local Police to register a civil or criminal case against them "for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds".
It would also make a reference to the Corporate Affairs ministry to initiate the process of winding up GSHP Realtech.
Earlier in May last year, Sebi had barred GSHP Realtech and its directors from raising funds through issue of securities till further directions.
According to Sebi, the company made a public issue of NCDs during the 2012-2013 to a total of 535 persons for an amount of Rs 2.64 crore.
