Regulator Sebi has barred Rising Agrotech and its present and former directors from the capital market for at least four years and directed them to refund the money that the company had collected illegally from investors.
According to a Sebi order, the company had allotted equity shares to 530 investors in 2010-11 and 930 investors in 2011-12 and the total amount mobilised by the firm by such allotment was more than Rs 1 crore.
Since the shares were issued to more than 49 people in each allotment, the offer qualified as a public issue and required their compulsory listing on a recognised stock exchange.
However, the company did not comply with the provision.
"I find that no material or record is available to indicate that RAL had made any such application seeking listing permission to any stock exchange. Further, noticees (the company, and its present and former directors) have never represented that they have made any refund of money due to the investors," Sebi Whole Time member G Mahalingam said in an order.
Under the rules, a company offering shares to the public, is required to make an application to a recognized stock exchange seeking permission to list such shares and if permission has not been applied for or not granted, the firm is required to forthwith repay with interest all money received from the applicants.
Accordingly, the company has asked Rising Agrotech and its present director Siddhartha Kayal and former directors -- Santosh Kumar Dwivedi, Dipan Kumar Sen, Binay Kumar Shaw, Lina Kayal, Awadhesh Kumar Singh and Amaresh Pandey --- to refund the money collected through the offer and allotment of equity shares, with an interest of 15 per cent per annum.
Within three months of completion of refund, they will have to file a certificate of such completion with Sebi.
These directors have also been restrained from the securities markets till the completion of repayment and for a further period of four years from the date of completion of the refund. Also, they have been prohibited from associating themselves with any listed company for the same period of time.
In case, they fail to comply with the directions, Sebi said it will initiate recovery proceedings.
Besides, Sebi has restrained the company's two present directors -- Bikash Bhandary and Sushovan Roy-- from the capital markets for only three months as "they were not the directors of the company when the equity shares of the company were issued and allotted".
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)