Sebi asks Kolkata-based NVD Solar to refund Rs 595 crore to investors

The Securities and Exchange Board of India (Sebi) has in a major crackdown directed Kolkata-based NVD Solar to refund close to Rs 600 crore that the company had illegally raised from the public.

In an order issued on November 27, Sebi set a three-month deadline for the return of the money with 15 per cent interest and barred NVD Solar and its directors from raising money in the capital market for three years from the date of completion of the refund.

The market regulator found that the company had raised money from the public without being listed on the stock exchanges.

A Sebi probe found that NVD Solar had raised Rs 595 crore through issuance of fresh equity shares to 1,09,480 entities during 2012-13 without complying with the regulatory provisions applicable for a public issue.

NVD Solar and its directors-Saibal Kumar Hazra, Subrata Kumar Mondal and Dipsekhar Mukherjee-have been asked to jointly and severally refund the entire amount of Rs 595 crore to the subscribers of its equity shares.

The three directors have also been restrained from associating themselves with any listed public company and any public company which intends to raise money from the public.

Interestingly, the company had initially denied that it had raised any money from the public.

However, the balance sheet of NVD Solar for the year ending March 31, 2013, showed that the money received from the issue of the equity shares was shown to be invested almost entirely in its associate companies.

Pursuant to allotment of equity shares by the company to 1,09,480 entities for an amount of Rs 595 crore, its share capital increased from Rs 2 crore to Rs 600 crore in 2012-13.

In October 2013, KPH Dream Cricket, owners of the IPL franchise Kings XI Punjab, had filed a criminal complaint against NVD Solar, the title sponsor, alleging the Group of cheating and duping them of around Rs 14 crore which they were supposed to pay as per the contract.