Markets regulator Sebi today ordered four companies to refund investors' money, amounting to more than Rs 20 crore, which they had raised by issuing securities without complying with the public issue norms.
The companies -- Rightmax Technotrade International, Great Overseas Commodeal, Waris Finance and Investment, Waris Healthcare -- and their directors have to refund the money within three months with an interest of 15 per cent per annum.
The companies and their directors have also been barred from the capital markets for four years.
A Securities and Exchange Board of India (Sebi) probe found that Rightmax had mobilised Rs 13.12 crore by allotting redeemable preference shares (RPS) to 2,763 persons during the financial year 2010-11.
Similarly, Great Overseas had issued RPS between 2010 and 2013 to at least 2,277 allottees raising Rs 1.99 crore.
Waris Finance had raised Rs 5.12 crore by issuing non-convertible debentures (NCD) from 2010-12.
Waris Healthcare had issued NCDs to 73 allottees during between 2011-13 and mobilised 0.13 crore.
Since the securities were issued by these firms to more than 50 people each, it qualified as a public issue that requires compulsory listing on the recognised stock exchange. They were also required to file a prospectus, among other things, which they failed to do.
In four similar orders, the regulator restrained the companies from "buying, selling or otherwise dealing in the securities market, directly or indirectly, in whatsoever manner for a period of four years or till the date of refund of money to the allottees, whichever is later".
Further, the companies and their directors would have to submit within 15 days complete details of their assets to Sebi.
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