Sebi orders recovery proceedings against Cell Industries, 2 directors

Sebi Wednesday ordered recovery proceedings against Cell Industries and its two directors for failing to repay the amount along with interest to the investors as directed earlier by the regulator.

"In the interest of investors... direct that recovery proceedings be immediately initiated against CIL (Cell Industries Ltd) and its directors," said the Securities and Exchange Board of India (Sebi) in an order.

The regulator in an earlier order had said that the company and its directors had issued redeemable preference shares (RPS) and non convertible debentures (NCD) in contravention of Sebi norms during 2016.

It had directed the firm and its directors to refund the amount to the investors along with the interest and after completing the repayments, the company shall file a certificate of such completion with Sebi within a period of three months and get it reviewed by two independent Chartered Accountants (CAs).

However, the entities failed to provide the certificates as required, said Sebi.

Moreover, the regulator found that interest was not paid to the investors, as directed in the earlier order and some of the investors had filed writ petition before Calcutta High Court against the firm and its directors as they are yet to receive money from the company.

"The company and its two directors are just engaging Sebi in correspondence with the idea of delaying and protracting compliance with the final order," said Sebi and thereby ordered recovery proceedings against them.