Milano Techno Engineering, MD Ordered to Refund Rs4.12 Crore to Investors, SEBI Bars Directors from Markets
Moneylife Digital Team 01 October 2025
Market regulator Securities and Exchange Board of India (SEBI) has directed Milani Techno Engineering Ltd (MTEL/ noticee 1) and the company’s managing director (MD) Prithi Paul Singh Sethi (noticee 2), to refund Rs4.12 crore collected from investors through the issuance of redeemable cumulative preference shares (RCPS) in FY10-11. The refund is to include interest at 15%pa (per annum) from the eighth day of collection until the date of actual repayment.
 
Other individuals involved in the RCPS issuance include Rajesh Kumar Sharma (noticee 3), Sanjay Kumar Upadhyay (noticee 4), Shiva Nand Mishra (noticee 5), Vishwa Bandhu Vashishta (noticee 6), Deena Nath Maurya (noticee 7), Arwind Tiwari (noticee 8), Pashupati Nath Dixit (noticee 9), Ramendra Prasad Sharma (noticee 10) and Mukesh Kumar Khare (noticee 11).
 
The others are Maiku Lal (noticee 12), Ram Vishal Telars (noticee 13), Surendra Singh (noticee 14), Ram Kishor Prajapati (noticee 15), Rajesh Singh Yadav (noticee 16), Sita Ram Prajapati (noticee 17), Bharat Subhash Prasad Maurya (noticee 18), and Chhotelal Shukla (noticee 19).
 
SEBI has also barred MTEL and the directors involved in the RCPS issuance, including Rajesh Kumar Sharma and Shiva Nand Mishra, from accessing the market for four years from the completion of refunds. Several other former directors have been restrained from market participation for one year due to their failure to ensure repayment during their tenure.
 
MTEL, an unlisted public company incorporated in 1964 as Sheetala Agro Industries Pvt Ltd and renamed in 2011, faced multiple complaints regarding the public issuance of RCPS. SEBI’s investigation revealed that the company had mobilised at least Rs4.12 crore from 127 investors through 14,143 RCPS, with complaints indicating non-payment of maturity proceeds.
 
Citing Section 67(3) of the Companies Act, 1956 and the precedent set by the Sahara case, SEBI observed that offering securities to more than 50 investors constitutes a public issue. MTEL, however, failed to comply with public issue requirements, including filing a prospectus with the registrar of companies (ROC), listing on a stock exchange, and maintaining a separate investor account.
 
SEBI found that MTEL violated Sections 56, 60, and 73 of the Companies Act, 1956 of the Companies Act, 2013. The company’s non-compliance led to investor grievances, prompting SEBI to take strict action.
 
SEBI examined the tenure of various directors and identified those responsible for the violations. Ms Sethi, along with directors Rajesh Sharma and Mr Mishra, was held liable for the irregularities during the RCPS issuance. Several other directors claimed forgery or misuse of their documents, but SEBI noted the absence of credible evidence, making their claims non-credible.
 
Under Section 73(2) of the Companies Act, 1956, MTEL and its MD are jointly and severally liable to repay investor monies with interest at 15%pa. SEBI emphasised the continuing obligation of MTEL and the MD to ensure complete refunds to the investors, stressing that the responsibility cannot be avoided.
 
To protect investor interests and ensure the orderly development of the securities market, SEBI has debarred the responsible directors from accessing the securities market for specified periods. 
 
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