Sebi asks Sunplant Constructions' 3 ex-directors to repay

Taking strict action against an illegal money-pooling activity, Sebi has directed Sunplant Constructions' three former directors to refund the money that the Kolkata-based firm had raised from the public through issuance of securities.
The refund has to be made along "with an interest of 15 per cent per annum", Sebi said in an order.
The regulator, through an order passed in December 2015, had already directed Sunplant Constructions and its other directors to jointly and severally refund the money raised by the firm through the issuance of redeemable preference shares (RPS).
The Securities and Exchange Board of India (Sebi) found that Sunplant Constructions had collected a little over Rs 24 crore by issuing redeemable preference shares (RPS) to over 2,000 investors in 2010-11 and 2011-12.

The shares were issued to over 50 people and accordingly, the offer of RPS qualified to be a public issue and required compulsory listing of 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.

"I find that Yoganand Prasad, Ameet Singh, Girija Shankar Kumar jointly and severally with SCL (Sunplant Constructions Ltd) and other directors as mentioned in the order dated December 31, 2015, are liable to refund the amounts collected from the investors with interest at the rate of 15 per cent per annum," Sebi Whole Time Member Madhabi Puri Buch said in an order dated November 27.

The regulator noted that Singh was a director of SCL in 2010-11, Kumar a director in 2010-11 and 2011-2012 and Prasad was the director only for a day -- October 1 to October 2, 2011, during the time of the issuance of shares.
Accordingly, Sebi has asked the firm's three former directors to refund the money collected by the company, during their respective periods of directorship through the issuance of the RPS from investors, with an interest of 15 per cent per annum.
After completion of refund, they have been directed to file a report of such completion with Sebi, within three months, certified by two independent chartered accountants.

In case they fail to comply with the order, Sebi may recover such amounts in accordance with provisions of securities laws.
Further, Sebi has prohibited Singh and Kumar from the securities markets till the refund and a further four years from the date of completion of the refund to investors. Also, they have been restrained from associating themselves with any listed public company during the period under review.
However, the regulator has imposed similar restrictions on Prasad, but the quantum is different. He has been barred from the capital markets for at least one year.