NEW DELHI: Taking strict action against an illegal money pooling activity, market regulator SEBI has directed Kolkata-based Sun-Plant Business to refund the money it had raised from public through issuance of securities.
The refund has to be made along ” with an interest of 15 per cent per annum compounded at half yearly intervals, from the date when the repayments became due to the investors till the date of actual payment” Sebi said in an order.
The Securities and Exchange Board of India (Sebi) found that Sun-Plant Business had collected an amount of Rs 4.17 crore from 470 investors by issuing redeemable preference shares (RPS) during 2005 to 2008.
According to the market regulator, the funds raised by the company through the issue amounted to a public offer as it was made to more than 50 persons and as a result required mandatory listing on the stock exchanges.
The regulator has directed Sun-Plant Business and its directors/promoters, to “Jointly and severally…Refund the money collected by the company through the issuance of RPS”. Besides, the company and its promoters and directors have been barred from the securities markets for four years and the ban will continue till the completion of refund to investors.
In case of Sun-Plant Business failing to comply with these directives, Sebi would make a reference to state government or local police to register a case against the company for fraud. Besides, the Ministry of Corporate Affairs would initiate the process of winding up of the company.
In November, SEBI had prohibited Sun-Plant Business from raising funds through issuance of securities besides barring the company and its directors from dealing in stock markets, till further orders.
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