Regulator Sebi has barred Fantasy Infraventure and Agrimart India Ltd and its three directors from the securities market for at least four years and directed them to refund the money the company collected illegally from the public.
The three directors who have been banned are Ranjeet Kumar, Ram Kailash and Rajoo, according to a Sebi order dated October 12.
Besides, the directors have been restrained from associating themselves with any listed public company from the date of the order till the expiry of four years from the date of completion of refunds to investors.
According to the regulator, Fantasy Infraventure raised Rs 19.96 lakh by allotting redeemable preference shares (RPS) to 127 investors in 2012-13.
Since the shares were issued to more than 50 people, the offer of NCDs qualified to be a public issue and required compulsory listing on a recognised stock exchange. However, the company 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.
The Securities and Exchange Board of India (Sebi), the firm and the directors will have to refund the money raised through issuance of RPS, with an annual interest of 15 per cent till the date of actual payment.
The regulator has permitted the company and the directors to sell the assets of the company for the sole purpose of making the refunds and deposit the proceeds in an escrow account with a nationalised bank.
In an interim order passed in March, 2015, Sebi had restrained the firm and the directors from accessing the securities market and directed the firm not to mobilise fresh funds from the investors "till further directions".