Markets regulator Sebi today ordered United Cosmetics Manufacturing to refund investors' money which it has illegally raised by issuing redeemable preference shares (RPS).
Besides, Securities and Exchange Board of India (Sebi)has barred the firm and its directors from the capital markets till further orders.
A Sebi probe found that the company had mobilised Rs 3.84 crore by issuing RPS to more than 2,955 individuals during 2006-07, 2008-09, 2009-2010 and 2013-14.
It further said that the actual number of allottees and amount mobilised by the company could be much higher.
Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on recognised stock exchanges.
"I am of the view that United Cosmetics Manufacturing is 'prima facie' engaged in fund mobilising activity from the public, through the offer of RPS and has violated the provisions of the Companies Act and Sebi NRPS regulations", Sebi's whole-time member S Raman said.
Accordingly, Sebi said "United Cosmetics Manufacturing shall not mobilise any fresh funds from investors through RPS or through the issuance of any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions."
Also, the company and its directors have been asked to provide a full inventory of all their assets and properties and have been prohibited from disposing of any of the properties or shares without prior permission from Sebi.
These directions "shall take effect immediately and shall be in force until further orders.
