Sebi orders two firms to refund over Rs 6 cr to investors

The firms and their directors need to refund the money within three months with an interest of 15 per cent per annum.

By: PTI | New Delhi | Updated: October 7, 2016 12:43 pm
Sebi, sebi refund, sebi asks two companies for refund, Morningstar Ventures, Gitanjali Udyog, sebi news, india news, indian express, SEBI has banned the two companies from the capital market for four years. (File Photo)

Market regulator Sebi has ordered two companies — Morningstar Ventures and Gitanjali Udyog — and their directors to refund investor money they had raised by issuing securities without complying with the norms. The firms and their directors need to refund the money within three months with an interest of 15 per cent per annum. Besides, the entities have been barred from the capital market for four years.

A Securities and Exchange Board of India (Sebi) probe found that Morningstar Ventures had issued redeemable preference shares (RPS) between 2009-12 to 1,224 allottees and mobilised funds to the tune of Rs 5.62 crore.

Similarly, Gitanjali Udyog raised Rs 39.02 lakh by issuing non-convertible debentures (NCDs) to at least 291 investors between 2011-15, as per Sebi’s interim order. Since the securities were issued by these firms to more than 50 people each, these qualified as a public issue, which requires compulsory listing on a recognised stock exchange. They were also required to file a prospectus, among other things, which they failed to do.

In two separate orders, the regulator restrained the companies from “buying, selling or otherwise dealing in the securities market, directly or indirectly, in whatsoever manner for a period of four years”. Further, the companies and their directors will have to submit within 15 days complete details of their assets to Sebi.

The order comes into force with immediate effect.