Capital markets regulator Sebi has ordered Bharatiya Real Estate Development and its directors to refund the money it had illegally raised by issuing redeemable preference shares (RPS).
The company has been directed to refund the money raised through RPS along with an interest of 15 per cent per annum.
Besides, the firm and its directors have also been barred from the capital market for a period of four years.
A Securities and Exchange Board of India (Sebi) probe found that the company had mobilised Rs 99.06 lakh by issuing RPS to 294 investors between 2011-2013.
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. The company and its directors were also required to file a prospectus, among other things, which they failed to do.
The firm and its directors are "restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, with immediate effect ", the order said.
In case the company fails to comply with these orders in three months, Sebi will make a reference to the state government or police to register a case against them for fraud, cheating and misappropriation of public funds.
Besides, Ministry of Corporate Affairs would initiate the process of winding up of the company.
