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Sebi orders Shreebhumi Constructions to refund investors' money

SCL Had Allotted Redeemable Preference Shares (RPS) Worth Rs 1.95 Crore To 241 People In 2011-12 And 2012-13, The Securities And Exchange Board Of India (SEBI) Pointed Out.

News Nation Bureau | Edited By : Shashikant Sharma | Updated on: 07 May 2018, 03:15:27 PM
Sebi orders Shreebhumi Constructions to refund investors' money

New Delhi:

Market regulator Sebi has barred Shreebhumi Constructions Ltd (SCL) and its three directors from the markets for at least four years and asked them to refund investors’ money that the company had collected illegally.

SCL had allotted redeemable preference shares (RPS) worth Rs 1.95 crore to 241 people in 2011-12 and 2012-13, the Securities and Exchange Board of India (SEBI) pointed out.

It said that since these shares were issued to over 50 investors by the company, this is qualified to be a public issue, which requires compulsory listing on recognised stock exchanges. Among others, the firm was also required to file prospectus, which it failed to do.

”I am of the view that SCL engaged in fund mobilising activity from the public, through the offer of RPS and has contravened the provisions of the Companies Act,” Sebi Whole Time Member Madhabi Puri Buch said in an order dated May 4.

In view of it, Sebi has asked the firm and its directors - Shubhranshu Singh, Chhotrai Majhi, Prabin Dash - to jointly refund the money raised from investors along with an annual interest of 15 per cent.  They have been restrained from the securities markets “till the expiry of four years from the date of completion of refunds to investors”. 

The directors have also been prohibited from associating themselves with any listed public firm or any registered intermediary, till completion of the refund and for a further four years from the date of completion of the repayment.

If they fail to comply with the directions of refund on the expiry of three months, Sebi may initiate recovery proceedings. Sebi, through an interim order passed in June last year, had barred the company and its directors from accessing the securities market.

(With inputs from agencies)

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First Published : 07 May 2018, 03:09:35 PM