Markets regulator Sebi today ordered Mondal Construction Company and its directors to refund the money it had illegally raised from investors.
It also barred the company and its directors -- Samarjit Mondal, Swapan Kumaar Mondal, Sachi Dulal Mondal, Sanjiv Jain and Indranil Chattopadhyay -- from the market, which will be in force for four years after completion of refund.
According to the order by the Securities and Exchange Board of India (Sebi), the company collected Rs 2.51 crore in several tranches from 3,981 people through redeemable preference shares. The funds were collected between 2005-06 and 2012-13.
Since the firm had issued shares to over 50 persons, the rules made it a public issue of securities, requiring a compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among others, which it failed to do.
The company, in its submission to the regulator, said it has already returned about Rs 2.42 crore to the investors and only a sum of Rs 9 lakh is pending.
"It is noted that no proof of payments was produced before Sebi," the regulator said.
Accordingly, Sebi directed the company and its directors to "refund the money collected by the company through the issuance of RPS, including the money collected from investors, till date, pending allotment, if any, with an interest of 15 per cent per annum compounded at half yearly intervals, from the date when the repayments became due".
Sebi further said any repayments as claimed to have been already made by the company shall be certified by chartered accountants.
In case the company fails to refund the money within three months, Sebi shall recover such amount as per the law, among other steps such as initiating appropriate action against the company, its promoters/directors and the persons/officers who are in default.
Furthermore, it will make a reference to the state government or the local police to register a civil/criminal case against the company. It will also approach the Ministry of Corporate Affairs to initiate the process of winding up the company.
