Sebi directs Sanket Investment, directors to refund investors' money

Regulator Sebi today barred Sanket Investments and Marketing Ltd (SIML) and its three directors from capital markets for at least four years for illegally raising funds from investors, and directed them to return the money along with interest.

According to Sebi, the city-based Sanket Investments had raised over Rs 58 lakh by issuing redeemable preference shares (RPS) to 698 persons in 2011-12.

"... none of their issues exceeded 50 persons or more at a time during the financial year 2011-2012 and the company had made continuous allotments of RPS in multiple tranches to 698 allottees and had attempted to retain the limit of each tranch within 49. However, I note that the aggregate number of allottees exeeded more than 49," Sebi Whole Time Member Madhabi Puri Buch said in an order.

 

"I find that the RPS by SIML falls within the....Companies Hence, the Offer of RPS are deemed to be public issues and SIML was mandated to comply with the 'public issue' norms as prescribed under the Companies Act," she added.

Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among other things, which it failed to do.

Accordingly, Sebi has directed the company and its directors -- Prashanta Kumar Dash, Pravat Kumar Dash, Nibedita Nath -- to refund the money along with an interest of 15 per cent per annum.

The firm and its directors have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors.

Further, directors have been restrained from associating themselves with any listed public company or any intermediary registered with Sebi "from the date of this Order till the expiry of four years from the date of completion of refunds to investor".

In case they fail to comply with the order in three months, Sebi may initiate a recovery proceedings.

In March last year, Sebi, through its interim order, had barred the company and its directors from the securities markets for violating public issue norms.