Sebi orders Hooghly Agrotech to refund investors' money

Markets regulator Sebi today ordered Hooghly Agrotech and its directors to refund investors' money raised illegally by issuing securities.
The entities are directed to refund the money along with an interest of 15 per cent per annum. Besides, the company and its directors are also barred from the capital markets for four years.
A Securities and Exchange Board of India (Sebi) probe found that the company had issued non convertible debentures (NCDs) to more than 50 investors and mobilised funds to the tune of Rs 38.40 lakh between 2009 to 2012.
As per the regulator, the details regarding the number of investors is not available as the company failed to provide such details in spite of repeated reminders.

Referring to the letters of allotment to at least 47 investors and five investor complaint received by Sebi, the regulator said, "it is reasonable to infer that the company had offered and allotted NCDs during the said financial years to more than 49 persons."
The securities were issued by the firm to more than 50 people, which qualified it as a public issue and requires compulsory listing on recognised stock exchanges. The company was also required to file a prospectus, among other things, which it failed to do.

The firm, its directors and debenture trustee- Hooghly Debenture Trust (represented by Bijay Sarkar) are "restrained from accessing the securities market and are further restrained from buying, selling or dealing in securities, in any manner whatsoever, for a period of four years," the order said.

Besides, Hooghly Debenture Trust has been barred from engaging itself as a debenture trustees or in any capacity as an intermediary in the securities market, without obtaining a certificate of registration to undertake that assignment.
Non-compliance of these orders within three months would make Sebi register a case with the state government or police against them for fraud, cheating and misappropriation of public funds.
Besides, Ministry of Corporate Affairs would initiate the process of winding up of the company.
The directions would come into force with immediate effect.