Capital market regulator Sebi today directed Rhine and Raavi Credits and Holdings Ltd and its directors to refund over Rs 36 crore raised from public "with immediate effect."
A probe by the Securities and Exchange Board of India (Sebi) found that the company had raised Rs 36.30 by issuing Non-Convertible Redeemable Debentures (NCDs) to more than 700 investors violating various norms.
Sebi said as the issue by the company was made to 50 or more persons, it was under a legal obligation to get listed on a stock exchange. Among others, it was also mandatory for the firm to bring out a prospectus with respect to the public issue.
In an order passed today, Sebi said the firm and its directors "jointly and severally, shall forthwith refund the money collected by the company through the issuance of NCDs to the investors ... 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."
The company has been asked to issue public notices detailing modalities for refund, including details of the investors within 15 days of the order.
Further, the firm and its directors have been restrained from accessing the securities market and this ban will continue till the expiry of four years from the date of final refund.
These directions would come into force with immediate effect.
Earlier in October 2013, Sebi had barred Rhine and Raavi Credits and Holdings and its directors from raising money from investors through issue of certain debentures, violating the public fund-raising norms.
