Tuesday, December 29, 2015

SEBI asks two companies Multi Purpose Bios India and Prayas Projects India to refund investors money

 New Delhi, Dec 29:

Cracking a whip on illegal money pooling schemes, markets regulator SEBI on Tuesday asked two companies —— Multi Purpose Bios India and Prayas Projects India —— and their directors to refund money collected from the public.

According to the Securities and Exchange Board of India (SEBI), Multi Purpose Bios collected Rs. 5.97 crore from more than 1,460 people through redeemable preference shares between financial year 2007-08 and 2011-12.

While, Prayas Projects raised Rs. 86.32 lakh from 154 investors through issue of non-convertible debentures during 2011-12 and 2012-13.

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 two similar worded orders.

According to the market regulator, the funds raised by the two Kolkata-based companies through the issues amounted to a public offer as it was made to more than 49 persons and as a result required mandatory listing on the stock exchanges.

The regulator has directed the companies and its directors to “jointly and severally, shall forthwith refund the money collected by the company through the issuance of redeemable preference shares“.

Besides, the companies 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 Multi Purpose Bios India and Prayas Projects India fail 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.

The regulator said that the order will come into force with immediate effect.

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