sebi:CO/479/CIS/03/2003
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Facts / Headnote
Directed the company as an existing collective investment scheme to wind up its existing scheme(s) and refund money collected with returns due as per terms of offer within one month, failing which prosecution under Section 24, 5-year capital market debarment, criminal reference to State Government/police and winding-up reference to Department of Company Affairs would follow
Provisions invoked
- s. 11B
- s. 11A
- s. 24
- s. 12
- s. 11
- s. 30
Regulations
- Reg. 68
- Reg. 74
- Reg. 73
- Reg. 65
- Reg. 5
- Reg. 5(1)
- Reg. 68(1)
Holding
The company's teak membership scheme and mango membership scheme are collective investment schemes under Section 11AA of the SEBI Act, and having operated without registration in violation of Section 12(1B) and Regulations 5, 68, 73 and 74, the company was directed to wind up its existing scheme(s) and refund investors with returns due within one month.
Full text
compliance of the various statutory requirements as laid down in the Act and the Regulations. 5. The company vide its letters dated July 31, 2002, August 14, 2002 and November 30, 2002 inter alia, submitted that it had not issued any Agro Bonds or Plantation Bonds and it had not given any assurances to any person for the return or earning of any amount of profit or produce in any manner and had not issued any advance cheque to any person. The company further submitted that as it was not operating collective investment schemes, the regulations were not applicable to it. It was further submitted that vide letter dated March 29, 2000, although the company had made an application seeking registration with SEBI, it had not received any response to the said letter. The company further submitted that as it was not running any collective investment schemes, it was not required to obtain registration. However, if SEBI came to the conclusion that the company had to seek registration, the application made by the company through its letter dated March 29, 2000 be treated as an application for registration .
collective investment scheme, reference has to be made to the press release issued by the Government of India on November 18, 1997 which inter alia directed all schemes through which instruments such as agro bonds, plantation bonds etc. are issued, to be treated as a collective investment scheme that would come under the regulatory purview of the SEBI. Thereafter, SEBI issued a press release dated November 26, 1997 as well as a public notice dated December 18, 1997 which was published in all the leading newspapers of India, whereby it directed all the entities running collective investment schemes to file with it the necessary information about their schemes by January, 15.1998.
12. Notice of the aforementioned directions was given by SEBI to all the plantation/agro based companies/entities by way of newspaper advertisement/notice which was published in all editions of the Indian Express on October 21, 1998 and November 9, 1998.
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Source: SecMarx — sebi:CO/479/CIS/03/2003. 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.