Sebi directs two firms to refund money to investors

Markets watchdog Sebi today ordered two companies, Raghav Capital and Infrastructure and Newland Agro Industries, as well as their directors to refund the money they had illegally raised from investors.
The Securities and Exchange Board of India (Sebi) has also barred the firms and their directors from the capital markets for four years.
A Sebi probe found that Raghav Capital had mobilised funds from the public through Collective Investment Scheme (CIS), without getting regulatory approvals, while Newland Agro had collected about Rs 38 crore by issuing redeemable preference shares (RPS) to 48,886 persons without complying with public issue norms.
Since the shares were issued by Newland Agro to more than 50 people, it qualified as a public issue that requires compulsory listing on the recognised stock exchange. It was also required to file a prospectus, among other things, which it failed to do.

In separate orders, Sebi has asked Raghav Capital and its directors -- Raj Kumar Raghav, Nirmala Raghav and Ritu Verma -- to wind up the existing CIS and refund the money to investors within three months.
It also ordered Newland Agro and its directors -- Newland Agro and its directors -- Dipankar De, Sanatan Paul, Kartick Charan, Himadri Bag, Koushik Roy, Pinku Kumar Das and Abhik Hajra -- to refund the money raised through RPS along with an interest of 15 per cent per annum.

The firms and their directors have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors.

In case the companies fail to comply with these orders, Sebi would make a reference to state government or local police to register a case against them for fraud, cheating and misappropriation of public funds.
Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.
These orders will come into force with immediate effect.