Markets regulator Sebi has ordered Greentouch Projects and its four directors to refund the investors’ money it had illegally raised by issuing securities.

These five entities have also been barred from the securities market with immediate effect and the ban would be in place till the expiry of four years from the date of completion of refunds to the investors.

Moreover, they have been ordered to refund the money along with 15 per cent annual interest.

The regulator found that Greentouch Projects had raised Rs 56 crore through non-convertible redeemable debentures to 20,549 persons without complying with public issued norms.

However, the company claimed to have already repaid a sum of over Rs 12.24 crore to its investors.

Since the shares were issued by the firm to more than 50 people, it qualified as a public issue that requires compulsory listing on a recognised stock exchange, among others.

In its order, Sebi said Greentouch Projects and its directors/promoters — Shyam Sundar Dey, Snehasish Sarkar, Sujoy Sinha and Sumon Sarkar — shall jointly refund the money collected by the company through the issuance of NCDs… With an interest of 15 per cent per annum.”

The company and its directors have been asked to issue public notice, in editions of two National Dailies (one English and one Hindi) and in one local daily detailing the modalities for refund, including details of contact persons within 15 days.

After completing the repayment, the company will have to file a certificate of such completion with Sebi, within three months, from two independent Chartered Accountants.

Also, the markets watchdog has restrained the company and its directors from the securities markets for four years and the ban would continue “till the expiry of four years from the date of completion of refunds to investors.”

In case they fails to comply with Sebi’s order, the regulator would initiate appropriate action.

Further, the regulator would make a reference to state government/local police to register a civil/criminal case against the company and its directors for “offences of fraud, cheating, criminal breach of trust and misappropriation of public funds.”

It would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the company.

These directions would come into force with immediate effect.

Press Trust of India
This article was published on December 2, 2015, in Business Standard