SEBI has slapped a total fine of Rs 25 lakh on Sai Prakash Properties Development and six individuals for non-compliance with the regulator’s earlier directive in a matter related to illegally raising of funds from investors.
A fine of Rs 25 lakh has been imposed on Sai Prakash Properties Development and six individuals, payable jointly or severally, according to an order dated October 29.
In December 2014, through an interim order, the watchdog had directed them not to collect fresh money from investors from its existing scheme, and also barred them from launching any new scheme or plan or float any new company or firm to raise funds.
Later in July 2019, through a final order, SEBI asked the entities to wind up existing collective investment schemes and refund the money collected by it under the schemes with returns.
This was to be done within three months of the final order as per the terms of the offer.
During its investigation, the watchdog found that there was continuation of deposits of funds in the bank accounts of Sai Prakash Properties when interim order was in force.
As a result, the regulator initiated adjudication proceedings for non-compliance with its order passed in December 2014.
According to SEBI, the noticees were directors or promoters of the company during the relevant time when interim directions was in force.
They were duty bound to comply with the directions but even after the interim order came into force, the noticees continued to mobilise money from investors, disregarding the directions of the watchdog and acting against the interest of investors, according to SEBI.
"Entities violating the directions issued by SEBI seriously compromise the regulatory framework and are detrimental to the interest of the investors in the securities market,” the regulator said.