Sebi asks Sunplant Constructions and Krutibibha Corporation to repay investors’ money

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NEW DELHI: Markets regulator Securities and Exchange Board of India (Sebi) has ordered two firms – Sunplant Constructions and Krutibibha Corporation – to refund the money they had raised illegally from investors.

Besides barring the firms and their directors from capital markets for four years, Sebi also directed them to pay 15 per cent interest annually along with the refund amount.

A Sebi probe found Sunplant Constructions had raised about Rs.24 crore by way of issuance of Redeemable Preference Shares (RPS) to 3,212 investors without complying with the public issue norm, while Krutibibha collected Rs.3.84 crore by issuing preference shares to 2,081 people.
Krutibibha claimed to have paid back around Rs.2.57 crore to investors.

Since the shares were issued to more than 50 persons by each company, they were required to list these securities on stock exchanges. However, the companies failed to comply with this norm.

Accordingly, Sebi said the companies and their directors will refund the money “through the issuance of RPS…with an interest of 15 per cent per annum… from the date when the repayments became due to the investors till the date of actual payment.”

Besides, they will also have to issue public notice in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including details of contact persons within 15 days.

After completing the repayments, the firms will have to file a report of such completion with Sebi within a period of three months, certified by two independent Chartered Accountants.

In case the firms fail to comply with the orders, Sebi will initiate attachment and recovery proceedings, besides registering a civil/criminal case against Sunplant Constructions and Krutibibha, among others.

Besides, Sebi has barred the firms and their directors from the capital markets and said such debarment will be in place for four years from “the date of completion of refunds to investors”.

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