Sebi asks company to refund investor money

Markets regulator Sebi has asked Jeevan Suraksha Real Estate and its directors to refund money to investors that the company raised illegally through redeemable preference shares (RPS).
Besides, the Securities and Exchange Board of India (Sebi) also imposed a ban on the company and its seven directors -- Chandan Das, Ashok Chakraborty, Uttam Acharjee, Champa Biswas, Sangita Das, Arju Acharjee and Dipamoni Acharjee -- for four years from the completion of refund.
According to Sebi, the Assam-based company raised Rs 6.30 crore from over 299 entities during 2006-07, 2008-09 and 2009-10.
Since shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on recognised stock exchanges, which the company failed to do.

Among others, it was also mandatory for the firms to bring out a prospectus with respect to the public issue.
In an order, Sebi asked Jeevan Suraksha Real Estate and its directors to "refund the money collected by the company through the issuance of RPS...With an interest of 15 per cent per annum compounded at half yearly intervals, from the date when the repayments became due to investors till the date of actual payment".

In addition, they "shall issue public notice, in all editions of two national dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact person within 15 days of this order coming into effect".

In case the company fails to comply with these directives, Sebi would make a reference to state government or local police to register a case against the company for fraud.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.