Sebi orders Greater Kolkata Infra to refund investor money

Sebi today directed Greater Kolkata Infrastructure and its directors to refund investor money, with 15 per cent annual interest, in a case related to illegal money pooling activity through issuance of securities.
The regulator has also barred the company and its directors from dealing in the capital markets in any manner with immediate effect "till the expiry of 4 years from the date of completion of refunds to investors as directed".
Besides, the directors -- Subir Dutta, Nakhat Sing Agarwalla and Bimalendu Rakshit -- have been restrained from associating themselves, as a directors or promoters, with any listed public company as well as any entity that intends to raise money with immediate effect "till expiry of 4 years from the date of completion of refunds to investors".

Securities and Exchange Board of India found that the company had raised Rs 9 crore from over 10,000 investors through illegal issuance of Non-Convertible Redeemable Debentures without permission from the regulator.
"In view of the...Violations and irregularities committed by the company and its directors in raising funds against issuance of debentures, the natural consequence would be to direct the company/its directors to refunds the money so collected from the investors with returns that were promised under such debentures," Sebi said in an order today.
The firm and its directors have to refund the money raised "through its illegal and irregular offer and allotment of NCDs including the money collected from investors, till date, pending allotment of securities, if any, with interest of 15 per cent per annum from the date of receipt of money from the investors till the date of repayment".

For the purpose of refund, the entities have been allowed to sell the assets of the company and deposit the proceeds in an escrow account opened with a nationalised bank.

After completing the repayments, the company would have to file a certificate of completion with Sebi.
"As the company has claimed to have repaid a sum of Rs 8,38,41,100 to its investors through redemption of debentures, the claimed repayments shall also be certified by Chartered Accountants," Sebi said.
Further, the regulator has also barred three individuals -- Bimalendu Rakshit, Sujay Roy Choudhury and Sherrie Lal Vasdev -- from acting as debenture trustees or an intermediary in securities market, "without obtaining a certificate of registration to undertake that assignment as required under law". The three had acted as debenture trustees in the Greater Kolkata's NCD issue.

Further, these individuals have been restrained from accessing the securities market "for a period of 4 years".
The entities would have to provide a full inventory of their assets, properties, among others to Sebi.
In case they fail to comply with Sebi orders, the regulator said it would take appropriate action against them including launching of prosecution proceedings and recovery proceedings.