Sebi asks HNC Infra to refund investors' money within 3 months

Capital markets regulator Sebi today ordered HNC Infrastructures & Shares India Ltd and its directors to refund the money, raised by the company through unauthorised investment scheme, to investors within three months.
Besides, the company and its directors have been prohibited from the securities markets for four years.
The Securities and Exchange Board of India (Sebi) found that the company was mobilising funds from public through land development schemes without getting regulatory approvals.
As many as 10,528 investors were found to have offered the unauthorised investment plan by HNC Infra and the total advance taken from the investors against land as on January 22, 2014, was about Rs 4.75 crore.

"I have no hesitation in holding that the company and its directors -- Santosh Kumar Saket, Ramnaresh Saket, Ramadhar Choudhary and Satish Kumar Arya -- were engaged in the illegal fund mobilising activity by floating/ sponsoring/ launching, unregistered/ unauthorised CIS," Sebi Whole Time Member Prashant Saran said in an order.
Accordingly, Sebi has asked HNC Infra and its directors to "wind up the existing Collective Investment Schemes (CIS) and refund the money collected by the said company under the schemes with returns which are due to its investors... Within a period of three months".

Thereafter within 15 days, the company has to submit a winding up and repayment report to Sebi.

In addition, they have been barred from collecting any money from the investors or launch or carry out any CIS.
They have been "restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of four years."
Moreover, they have been asked to submit the full inventory of the assets owned by them and details of all their bank and demat accounts.
The order will come into force with immediate effect, Sebi said.
In case HNC Infra fails to comply with order, Sebi will prohibit the firm and its directors from the securities market even after four years till all the CIS are "wound up and all the money mobilised through such schemes are refunded to its investors with returns which are due to them."

Further, Sebi will also make a reference to Corporate Affairs Ministry to initiate the process of winding up of HNC Infra. It will also initiate attachment and recovery proceedings under the regulations.