Markets regulator Sebi today ordered Vishwamitra International Infra, its group company and five directors to refund investors' money in three months, which they had raised by issuing non-convertible debentures (NCDs) without complying with the public issue norms.
Besides, barring the firms and their directors for four years, they have been asked to refund the money along with an interest of 15 per cent per annum.
A Sebi probe found that Vishwamitra International Infra Ltd (VIIL) had allotted over 41.5 lakh NCDs worth Rs 41.61 crore in 2012-13 to Vishwamitra India Tour & Hotels Ltd (its group company), which in turn transferred these NCDs to 83,109 investors, without complying with the Companies Act.
It found that as on March 31, 2014, the amount raised through offer of NCDs by VIIL was Rs 106.75 crore.
The securities were issued by the firms to more than 50 people, which qualified it as a public issue and required compulsory listing on recognised stock exchanges. They were also required to file a prospectus, among other things, which they failed to do.
"I find that in respect of the issuances of NCDs by VIIL during the financial year 2012-13 and the subsequent transfer of the NCDs by Vishwamitra India Tour & Hotels Ltd (VITHL), the Vishwamitra entities have failed to comply with the provisions of Companies Act", Sebi said in an order today.
The firms and their directors are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, for four years, the order said.
