Sebi, the regulator of the securities market in India, has disqualified BNP Real Estate and Allied Ltd and its 14 former and present directors from the securities market for at least four years and asked them to return the money they had collected illegally from the public.
The directors, who happen to be the firm's promoters, have also been restrained from associating themselves with any listed public company from the date of the order till the expiry of four years from the date of completion of refunds to investors.
In an order, Sebi noted that BNP Real Estate had issued and allotted Redeemable Preference Shares (RPS) to 2,993 investors during financial years 2008-09, 2009-10, 2011- 12, 2012-13 and 2013-14 to raise Rs 9.85 cr.
The firm had also issued over 1 lakh equity shares to 178 persons during the financial year 2009-10 and raised an amount of more than Rs 10.91 lakh, as per the Securities and Exchange Board of India (Sebi).
As the shares were issued to more than 50 people, the offers of RPS and equity shares can be considered a public issue requiring compulsory listing of the securities on a recognised stock exchange. However, BNP Real Estate did not comply with the provision.
Among other requirements, the firm was to register a prospectus with the Registrar of Companies under the Companies Act, which it failed to do.
Sebi has asked the firm and the 14 directors to refund the money collected from investors with an annual interest of 15 per cent.
Earlier, in an interim order passed in September 2015, Sebi had restrained BNP Real Estate and the 14 directors from accessing the securities market and also prohibited them from mobilising funds through the issue of convertible RPS and equity shares "till further directions".