New Delhi: Markets regulator SEBI has ordered En Aromatic & Petro Chemicals Ltd and its directors to refund investors' money, which they had illegally raised by issuing redeemable preference shares (RPS). Besides, Securities and Exchange Board of India (SEBI) has barred the firm and their directors from the capital markets for four years.
A SEBI probe found that the company had mobilised Rs 61.5 crore by issuing RPS to more than 89,000 individuals between 2003-04 and 2010-11. Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on recognised stock exchanges.
The company and its directors were also required to file a prospectus, among other things, which they failed to do. The regulator ordered the company and directors to refund the money raised through RPS along with an interest of 15 per cent per annum. The firm and its directors have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors.
In case the company fails to comply with these orders, SEBI would make a reference to the state government or police to register a case against them for fraud, cheating and misappropriation of public funds. Besides, Ministry Corporate Affairs would initiate the process of winding up of the company.
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