Continuing with strict action against entities raising public money illegally, Sebi today restrained Angel Rural Development and its present as well as former directors from the markets for at least four years.
Besides, Securities and Exchange Board of India (Sebi) has asked them to refund the money raised from investors without complying with the public issue norms.
The present directors are Hasibul Haque, Sunirmal Goswami and Basudev Ghosh, while Shekh Nazibulla, Nabina Jahan and Shekh Abdual Robial are former directors.
Sebi found that the company had garnered over Rs 34 lakh through issuance of non-convertible debentures (NCDs) to at least 96 investors in 2011-12 and 2012-13 and violated public issue norms.
Since the shares were issued to more than 50 people, the offer of NCDs qualified to be a public issue and required compulsory listing of the securities on a recognised stock exchange. However, the firm did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do.
The firm and its present and former directors have to refund the money raised from investors with an annual interest of 15 per cent, Sebi said in the order.
Also, they have been barred from associating themselves with any listed public firm from the date of the order till the expiry of four years from the date of completion of refunds to investors. Further, Sebi has banned the debenture trustee Rojina Begam from the markets for four years.
After completing the repayments, they have been directed to file a report of such completion with Sebi, within a period of three months, certified by two independent chartered accountants.
In case the company and present and former directors fail to comply with the order, Sebi may recover such amounts in accordance with provisions of securities laws. Besides, it may initiate appropriate action against them, including adjudication proceedings.
Also, it would make a reference to the state government or local police to register a civil or criminal case against these entities for offences of "fraud, cheating, criminal breach of trust and misappropriation of public funds".
Earlier, Sebi through an interim order passed in November 2014 had barred the firm and its present and former directors from the securities market till further directions. It also directed the company not to mobilise fresh funds from the investors.
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