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Regulator Sebi today banned Swasata Steel Industries Ltd (SSIL) and its seven directors from the securities market for at least four years in a case related to illegally raising Rs 12 crore from the public.
According to a Sebi order, SSIL had issued and allotted secured redeemable non-convertible debentures (NCDs) to at least 795 investors during the financial years 2010-2011, 2011-2012 and 2012-2013 and raised at least an amount of Rs 12.19 crore.
Since the securities were issued to more than 50 people, the offer of NCDs qualified to be a public issue and required compulsory their listing on a recognised stock exchange. However, SSIL did not comply with the provision.
Among other requirements, the firm was required to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do.
Of the seven directors, while two -- Joydeb Biswas and Prasanta Chatterjee -- are present, five -- Avijit Chakraborty, Manas Kumar Dan, Satya Ranjan Chaudhuri, Chitta Ranjan Chowdhury and Swapna Chaudhuri -- are erstwhile.
The directors have also been restrained from associating themselves with any listed public company for at least four years, according to the order.
Besides, the firm and five directors -- Manas Kumar Dan, Satya Ranjan Chaudhuri, Chitta Ranjan Chowdhury, Swapna Chaudhuri and Prasanta Chatterjee -- have to refund the money collected by the company including the application money collected from investors with an annual interest of 15 per cent.
The regulator said that Joydeb Biswas and Avijit Chakraborty are not liable for refund of money as they were not directors during the relevant time of fund mobilisation.
However, according to Sebi, they were responsible for all the acts of the company during the period of their directorship and were obligated to ensure refund of the money collected by the firm to the investors.
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