sebi:CO/17/CIS/04/2003

SEBI · SEBI · 1997-12-18 · G.N. Bajpai, Chairman, Securities and Exchange Board of India

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Debarred from capital market activities for 5 years

Provisions invoked

• s. 11B
• s. 24
• s. 12

Regulations

• Reg. 69
• Reg. 73
• Reg. 65

Holding

SEBI debarred M/s Kalptaru Agro India Ltd., its promoters, directors, managers and persons in charge of its schemes as named in Annexure II from associating with, dealing in, accessing and operating in the capital market for 5 years from the date of the Order.

Full text

company and audited by statutory auditors. On account of the failure to do so, vide a SEBI order dated February 10, 2003 (copy of which is enclosed as Annexure I), the company was directed under Section 11B of the SEBI Act, 1992 (hereinafter referred to as the Act) read with Regulation 65 of the Regulations, to refund the money collected under the scheme(s) alongwith returns which were due to investors as per the terms of the offer within a period of one month from the date of the said order. The copy of the aforesaid order was sent by speed post to the company vide letter dated February 14, 2003. However, the company has failed to comply with the directions of the aforesaid order or even report compliance of the aforesaid order. Thus, it has violated the provisions of Regulation 73 of the Regulations. In view of the same, in exercise of powers conferred under Section 11B of the Act, read with Regulation 65 of the Regulations, without prejudice to the right of SEBI to take any other action as it may deem fit, I hereby debar the company/its promoters/its directors/its managers/persons in charge of the business of its schemes, including names as contained in Annexure II from, in any capacity whatsoever, associating with the capital market related activities, dealing in securities, accessing the capital market, associating with any of the intermediaries in the capital market and operating in the capital market for a period of 5 years from the date of this Order. Any aggrieved pe

M/s Kalptaru Agro India Ltd. (hereinafter referred to as the company) had filed information / details with SEBI regarding its Collective Investment Schemes (CIS) pursuant to the public notice dated 18.12.97 issued by SEBI. Subsequent to the notification of SEBI (Collective Investment Schemes) – Regulations, 1999 (hereinafter referred to as the Regulations) on October 15, 1999, the company applied for registration under the provisions of the Regulations. The application and other details available on record were examined by SEBI. Various opportunities of being heard were also granted to the company. In the course of the said hearings, it emerged that the company had continued to mobilize funds in contravention of SEBI directions dated 24.2.98 & the Order of the Hon’ble High Court of Delhi dated 7.10.98 / 13.10.98 passed in the CWP 3352/98. The said action of the company resulted in the violation of Regulation 69 of the Regulations. Hence, the company was advised to immediately repay the amounts of money mobilized in contravention of the above-mentioned directions and Orders. The company filed an estimated repayment schedule spanning seven years till 2008-2009 with SEBI with respect to these funds. The same was not found to be acceptable by SEBI. Further, the company did not fulfil certain requirements of the Regulations for grant of registration. Therefore, its application was rejected by SEBI on 29.6.2002. While intimating the grounds of rejection of its application, SEBI vid

1. Initiation of prosecution proceedings under Section 24 of the SEBI Act, 1992 against the company / its promoters / its directors / its managers / persons in charge of the business of its scheme(s).

Source: SecMarx — sebi:CO/17/CIS/04/2003. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.