MUMBAI, July 10: The Securities and Exchange Board of India (SEBI) has directed G S Organics Limited (GSOL) to refund the subscription amount collected in the public issue along with interest. It has directed the firm to refund the face value of the shares along with interest to those applicants who had been issued shares.Sebi said GSOL violated the provisions of Sections 69 and 73 of the Companies Act, Sebi guidelines and the terms and conditions of the prospectus. In order to protect the larger interest of the investors, it has directed the company under Section 11B of the Sebi Act, to refund the subscription.
GSOL came out with a public issue of 39,72,400 equity shares of Rs 10 each for cash at par which opened on September 17, 1996 and closed four days later. Inquiries led Sebi to probe allegations of serious irregularities in the public issue, Sebi said in a statement. The inquiries revealed that the issue was subscribed mainly by applications accompanied with stock invests to Vijaya Bank account ofG S Organics. Out of 2029 applications, 99.73 per cent (2014) were through power of attorney holder Phi-Alpha Investments Private Limited.
The company did not receive the minimum subscriptions as stock invests worth Rs 200 lakh comprising 99.73 per cent of total issue were not encashed, Sebi said.
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