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Capital markets regulator Securities and Exchange Board of India has directed Angel Allied India Ltd and its directors to refund investor money that it raised by issuing securities without complying with public issue norms.
Besides, the watchdog has barred the firm and its directors from capital markets for four years from the date of completion of refunds, SEBI said in an order.
Angel Allied raised little over ₹1 crore through issuance of redeemable, secured non-convertible debentures (NCD) to at least 334 persons in 2012-13 and 2013-14, the order said.
Since the securities were issued to over 50 persons, which under the rules made it a public issue. Hence, the companies were required to make a compulsory listing on a recognised stock exchange. Besides, was required to file a prospectus, among others, which it failed to do.
“In view of the violations committed by the company and its directors, to safeguard the interest of the investors who had subscribed to such NCDs...to safeguard their investments, and to further ensure orderly development of securities market, it also becomes necessary for SEBI to issue appropriate directions against the company and the other noticees,” SEBI Whole Time Member Madhbi Puri Buch said.
Compliance or recovery
In case, they failed 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.
In an order passed on September 29, SEBI has asked Angel Allied, Sandip Pal, Sekh Nazibulla, Santosh Kumar Mishra and Devid Haslaf to refund the money collected by the firm during their respective period of directorship through the issuance of NCDs along with an interest of 15 per cent per annum.
Earlier, through an interim order in June 2015, SEBI had prohibited the firm and its directors from the capital markets “till further directions”.
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