Sebi has barred Milan and Milan International and its present and former directors from the capital markets for at least four years and asked them to refund the money raised from investors without complying with the public issue norms.
Besides, they have been restrained from associating themselves with any listed public company from the date of the order till the expiry of four years from the date of completion of refunds to investors, Sebi said in order dated October 23.
Apart from the company’s present and former directors, Sebi has also barred its two promoters –Shamshad Ali and S K Izak. The present directors are – Sangram Keshori Samal, Bhikari Charan Lenka and Jagdish Sarang – and Nizamuddin Khan is a former director.
The regulator noted that the company had issued redeemable preference shares (RPS) to 260 investors during 2010–11 and raised Rs 14.52 crore. Since the shares were issued to more than 50 people, the offer of RPS qualified to be a public issue and required compulsory listing of the securities on a recognised stock exchange. However, the firm did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies (RoC) under the Companies Act, which it failed to do. The firm and its present and former directors have to refund the money raised from investors with an annual interest of 15 per cent, as per the ruling.
After completing the repayments, they have been directed to file a report with Sebi within a period of three months certified by two independent chartered accountants. In case, these entities fail to comply with the order, Sebi may recover such amounts in accordance with provisions of securities laws. Besides, it may initiate adjudication proceedings. Also, it will make a reference to the state government or local police to register a civil or criminal case against these entities for offences of “fraud, cheating, criminal breach of trust and misappropriation of public funds”.
In an interim order passed in January 2016, Sebi had restrained the company, its directors and promoters from accessing the securities market and directed the firm not to mobilise fresh funds from the investors “till further directions”.