NEW DELHI: Markets regulator Sebi has ordered Phenix Properties and its 13 directors to refund investors money raised illegally by issuing securities.

Besides, the firm and its directors have been barred from the capital markets for four years.

A Securities and Exchange Board of India (Sebi) probe found that the company had issued redeemable preference shares (RPS) to 61,089 allottees during 2006-2010 without complying with the public issue norms. Since the shares were issued by the firm to more than 49 people, it qualified as a public issue that required compulsory listing on a recognised stock exchange. It was also required to file a prospectus, among other things, which it failed to do so. In a 22-page order, the regulator has directed the company and its 13 directors to refund the money along with an interest of 15 per cent per annum. The entities have been restrained and prohibited from buying, selling or otherwise dealing in the securities markets for four years and the ban will continue till the completion of refunds to investors. In case the firm fails to comply with the order in three months, Sebi would make a reference to the state government or local police to register a case against them for fraud, cheating and misappropriation of public funds. Besides, it would also make a reference to the Ministry of Corporate Affairs to initiate appropriate action as deemed fit. The watchdog has disposed of proceedings against 5 other directors of the company as they had resigned before the first date of allotment of RPS and there was no evidence to show their involvement. The directions would come into force with immediate effect. — PTI