Sebi orders Micro Finance to refund Rs 88 cr in 3 months

Clamping down on illegal fund raising schemes, Sebi today ordered Micro Finance Ltd to refund over Rs 88 crore investor money raised through such schemes without complying with the public issue norms.
Besides, the firm and its six directors have been barred from the capital markets for four years.
The refund has to be made within three months along with an interest of 15 per cent per annum.
A Securities and Exchange Board of India (Sebi) probe found that the company mobilised over Rs 88.91 crore from at least 1,21,222 investors by issuing Cumulative Convertible Preference shares (CCPS) between 2005-2013.

Since the shares were issued by the firm to more than 49 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.
The entities are "prohibited from buying, selling or otherwise dealing the securities market, directly or indirectly, in whatsoever manner for a period of four years," Sebi said in an order.
In case the firm fails to comply with the directions, Sebi may initiate appropriate action in accordance with the provisions applicable laws.
The order would come into force with immediate effect.