Sebi directs Vibgyor to refund investors' money

Continuing its clamp down on illegal investment activities, market regulator Sebi today asked Vibgyor Allied Infrastructure Ltd (VAIL) and its promoters to refund the money raised from investors along with with interest within three months.
Besides, the company and its promoters have also been barred from the securities market for three years.
The Securities and Exchange Board of India (Sebi) found that Vibgyor had raised Rs 61.76 crore from 49,562 investors through optionally fully convertible debentures (OFCDs) in violation of the statutory requirements.
The company raised money by way of issue of debentures from a large number of persons, without complying with various provisions of Companies Act as well as Sebi regulations.

Passing the order, Sebi directed Vibgyor as well as its promoter and ex-director Raja Bhadra, ex-director Rana Bhadra and director Rabindra Nath Dey, to refund the money along with 15 per cent annual interest rate. The refund should be done within three months.
The three individuals and the company have been restrained from associating themselves with any listed public company till the expiry of three years from the date of completion of refund.

As per the order, jointly and severally money collected from the subscribers of OFCDs should be returned with "interest at the rate of 15 per cent per annum from the date of receipt of money till the date of such refund or the redemption value promised in the RHPs and accrued till the date of refund, whichever is higher".

For raising monies, the company had issued Red Herring Prospectuses in May and June 2009.
Among others, it was found that most of the addresses of the investors -- who purchased the OFCDs -- were incomplete and ambiguous.
The Registrar of Companies (RoC), West Bengal, had intimated Sebi about Vibgyor violating norms while mentioning it is taking action from its side.
"The RoC also requested Sebi to take appropriate action against VAIL for violating Sebi Regulations/Guidelines," the order said.