Regulator Sebi has ordered Neesa Technologies and its eight directors to refund the money it raised illegally from investors within three months and also barred them from the securities market for at least four years.
Also, they have been directed to refund the money along with an interest of 15 per cent per annum.
The company had raised funds through optionally convertible debentures (OCD) from 185 investors and in doing so, failed to comply with the provisions of the Companies Act and ICDR (Issue of Capital and Disclosure Requirements) norms.
The securities were issued by the firm to more than 50 people, which qualified it as a public issue that requires compulsory listing on recognised stock exchanges.
The firm, in its annual report, had mentioned OCD as a part of long term borrowings' and the amount garnered through OCDs as on March 31, 2013 was Rs 63 lakh and further funds mopped as on March 31, 2014 was over Rs 1.86 crore.
The company and its directors were also required to file a prospectus, among other things, which they failed to do.
Accordingly, Sebi, in an order passed on Tuesday, said Neesa Technologies and its eight directors jointly and severally within a period of three months, refund all the money collected by the company through OCD, with an interest or 15 per cent per annum.
It further said that the liability of directors shall be for the money collected during their respective period of directorship. Some of the directors have stepped down from their positions.
Besides, the company and its directors have been barred from the capital markets till the expiry of four years from the date of completion of refunds to investors.
Further, they have also been directed to provide a full inventory of all their assets and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.
Also, they have been prevented from selling any of their assets, including shares and mutual funds.
In view of the exceptional circumstances emerging due to the outbreak of a COVID-19 and consequential lockdown in the country, the directions... shall come into force on April 15, 2020, Sebi noted.
Earlier in June 2016, Sebi had ordered the company and its officials to refund the money illegally raised from investors. Further, they have been barred from the capital markets for four years.
The company had raised nearly Rs 6 crore in 2013-14 through the issuance of non-convertible debentures (NCDs) in an illegal manner.
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