Sebi orders Affiance Industries to refund investors' money

Cracking the whip on illegal money pooling schemes, Sebi has ordered Affiance Industries and its directors to refund investors' money and has also imposed a four-year ban on them.
A Securities and Exchange Board of India (Sebi) probe found the firm had mobilised Rs 76 lakh by issuing redeemable preference shares (RPS) to 339 persons in 2010-11 without complying with the public issue norms.
Since the shares were issued by the firm to more than 49 people, it qualified as a public issue that requires compulsory listing on recognised stock exchanges, which it failed to do. Among others, it was also mandatory for the firm to bring out a prospectus with respect to the public issue.

In an order, Sebi has asked the company and its directors -- Habib Sarkar, Morshed Mehedi Hossain, Lal Mahammad, Mir Rabiul Islam, Raja Mamun Hasan, Minarul Mondol, Washim Raja Ansari and Md Shariful Haque-- to jointly refund the money collected from investors along with an interest of 15 per cent per annum.
Besides, the company and its directors have also 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 refund to investors.
In case the company fails to comply with the orders in three months, Sebi would make a reference to the state government or local police to register a case against them for fraud, cheating and misappropriation of public funds.

Besides, the regulator would also make a reference to the Ministry of Corporate Affairs to initiate appropriate action.