Markets regulator Sebi today directed Magnox Infraprojects to refund the money it had illegally raised from investors and also ordered the West Bengal-based firm to issue public notices regarding it.
Besides barring the firm and its directors from capital markets for four year, Securities and Exchange Board of India (Sebi) also directed the company to pay 15 per cent interest annually to investors.
A Sebi probe found that Magnox had collected an amount of Rs 2.31 crore by issuing Redeemable Preference Shares to 2,110 persons in 2012-13, without complying with the public issue norms.
Since the shares were issued to over 50 people, the issuance qualified as a public issue that requires compulsory listing on a recognised stock exchange. It was also required to file a prospectus among others which it failed to do.
In a ruling today, Sebi has ordered Magnox and its directors "to refund the money collected by the company through the issuance of RPS... 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 and its directors have also been "restrained and prohibited from buying, selling or otherwise dealing in the securities market, from the date of this order till the expiry of four years from the date of completion of refunds to investors."
In addition, they "shall issue public notice, in all editions of two national dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact person within 15 days of this order coming into effect."
In case Magnox fails to comply with these directives, Sebi would make a reference to state government or local police to register a case against the company for fraud.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.
Among the barred directors are Dipankar Das, Sudip Rauth, Debasish Debnath, Samrat Bikash Barua and Purnendu Sekhar Halder, among others.
