sebi:CO/177/IMD/11/2003

SEBI · SEBI · 2001-02-23 · G N Bajpai, Chairman, Securities and Exchange Board of India

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Facts / Headnote

Company directed to refund money collected under the schemes with returns due as per terms of offer within one month, failing which prosecution, debarment and referrals for civil/criminal and winding-up action to follow

Provisions invoked

• s. 11B
• s. 4(3)
• s. 24

Regulations

• Reg. 73(1)
• Reg. 71
• Reg. 73
• Reg. 73(2)
• Reg. 65
• Reg. 6
• Reg. 71(1)
• Reg. 11(b)
• Reg. 71(1)(h)

Holding

The company was directed to refund the money collected under its collective investment schemes with returns due to investors as per the terms of the offer within one month from the date of the order, failing which prosecution, debarment and other referrals would follow.

Full text

operated by it. Pursuant to the press release and the public notice issued by Securities and Exchange Board of India (hereinafter referred to as SEBI) on November 26, 1997 and December 18, 1997 respectively, the company filed certain information/details in respect of its schemes with SEBI regarding its collective investment schemes.

4. As the company failed to comply with the conditions specified in Regulation 71 of the said Regulations and also failed to submit the interim report on the current status regarding compliance with the provisions of the said Regulations, SEBI granted the company an opportunity of personal hearing on November 30, 2002, before proceeding with further action against it. However as the company failed to appear for the said hearing, another opportunity was granted to it on December 28, 2002. On the said date, Shri Ramesh Patil, Director and a representative of Shri Himanshu Patil, Director appeared before me and submitted that the registered office of the company had been shifted to Mangaon. Upon a request made by the company, some more time was granted to it for submitting a report to SEBI as regards compliance of the conditions specified in the Regulations as well as the state of redressal of the pending investor grievances. Further, copies of the pending investor grievances were handed over to the Directors present during the hearing who were further informed that in case the company failed to comply with the requirements of Regulation 71 by February 28, 2003 (i.e. the last date of the validity of the provisional registration) the company would be required to wind up its schemes in terms of Regulation 73 of the said Regulations. Despite the same, the company failed to fulfill the requirements of Regulation 71(1) of the said Regulations within the stipulated period of two years

up the existing schemes in accordance with the procedure stipulated in regulation 73(2) to (9) of the said Regulations. 6. The company failed to comply with several requirements specified in regulation 71(1) of the said Regulations such as getting the existing schemes rated, appraised, formation of a trust etc within the stipulated period of two years from the date of grant of the provisional registration. Therefore, the company was, vide letter dated April 4, 2003, called upon by SEBI to wind up the existing schemes and make repayment to the investors. Accordingly, the company was directed to send information memorandum to the investors, who had subscribed to the schemes, within two months from the date of receipt of the aforesaid intimation from SEBI in terms of Regulation 73(2) of the said Regulations. Further, on completion of the winding up and repayment to the investors in terms of Regulation 73 of the said Regulations, the company was called upon to file a detailed report in the format prescribed by SEBI, so as to reach SEBI within three and half months from the date of the Information Memorandum. The said order was published by SEBI in the SEBI website www.sebi.gov.in and a press release regarding passing of the said order was also issued. Accordingly, the company was required, upon the completion of the winding up of the schemes of the company and repayment to the investors in the manner specified in Regulation 73 of the said Regulations, to file a “Winding up and Re

Source: SecMarx — sebi:CO/177/IMD/11/2003. 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.