Taking strict action against illegal money pooling activities, markets regulator Sebi today directed two companies -- BNP Real Estate and Allied Ltd and Federal Agro Commercials -- to refund the money raised from investors.
Besides barring the firm, its directors from the capital markets, Securities and Exchange Board of India (Sebi) also directed them to pay 15 per cent interest annually to investors.
According to Sebi, BNP Real Estate had mobilised around 9.85 crore by issuing Redeemable Preference Shares to 179 investors between March 2009 and 2014, while Federal Agro garnered Rs 26 lakh from 310 persons during 2011-12 and 2012-13.
Since the shares were issued to over 50 people, the issuance qualified as a public issue that requires compulsory listing on a recognised stock exchange. The companies were also required to file a prospectus among others which they failed to do.
BNP Real Estate, its promoters and directors have also been restrained and prohibited from the securities market, for an "appropriate period", while Federal Agro and its directors have been barred from the capital markets for four years.
Sebi further said that ban on Federal Agro and its directors will continue "till the expiry of four years from the date of completion of refunds to investors".
In case Federal Agro fails to comply with the Sebi's order, Sebi will make a reference to the state government/ local police to register a civil/criminal case against the company and its directors.
Sebi will also make a reference to the Ministry of Corporate Affairs to initiate the process of winding up the company.
