Sebi asks Cell Realcon, IMAX Projects to refund investors'

Sebi has directed two firms -- Cell Realcon Corporation and IMAX Projects India -- and their directors to refund investors' money that they raised by issuing securities without complying with public issue norms.

Besides, the watchdog has barred them from capital markets for four years from the date of completion of refunds, the Securities and Exchange Board of India (Sebi) said in separate orders.

Cell Realcon raised Rs 19.46 lakh through issuance of non-convertible debentures (NCDs) to at least 70 persons in 2012-13 and 2013-14, while IMAX Projects garnered around Rs 3 crore by allotting redeemable preference shares (RPS) to nearly 2,200 people between 2009-10 and 2012-13.

IMAX Projects, however, claimed that it made refunds of a little over Rs 2 crore to investors.

The securities were issued to over 50 persons by each company, which under the rules made it a public issue. Hence, the companies were required to make a compulsory listing on a stock exchange. Besides, the firms were required to file a prospectus, among others, which they failed to do.

According to Sebi, the companies were engaged in fund mobilising activity from the public through the offer of RPS and NCDs and contravened the provisions of the Companies Act.

In orders passed on October 4, Sebi has asked the firms and their directors to refund the money raised through the issuance of securities along with an interest of 15 per cent per annum.

It has also restrained the firms' directors from associating themselves with any listed public company and any public entity that intends to raise money from the public, or any intermediary registered with the regulator from the day of these orders "till the expiry of four years from the date of completion of refunds to investors".

In case, they fail to comply with the directions of refund on expiry of three months period, Sebi would initiate recovery proceedings.

Besides, it would make a reference to the state government or local police to register a civil or criminal case against them for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds.

Earlier through interim orders in 2015, Sebi had prohibited these firms and their directors from the capital markets "till further directions".

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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