sebi:EAD/KS/AS/AO/10490-10494/2020-21

SEBI · SEBI · 2013-06-21 · K Saravanan, Adjudicating Officer

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

Facts / Headnote

Violation of Section 12(1B) of the SEBI Act, 1992 read with Regulation 3 of CIS Regulations, 1999 established; monetary penalty imposed under Section 15D(a) of the SEBI Act, 1992

Provisions invoked

• s. 11A
• s. 24
• s. 15
• s. 19
• s. 12
• s. 27
• s. 15J
• s. 15F
• s. 15D
• s. 27(1)
• s. 45
• s. 58A
• s. 620A
• s. 29
• s. 291
• s. 2(60)

Regulations

• Reg. 7
• Reg. 73
• Reg. 3

Parties

• Alchemist Infra Realty Limited
• Chandra Shekhar Chauhan
• Brij Mohan Mahajan
• Narayan
• Balvir Singh

Holding

The Noticees were engaged in fund mobilising activity from the public through investment contracts by floating collective investment schemes as defined in Section 11AA of the SEBI Act without obtaining registration as mandated under Section 12(1B) of the SEBI Act, 1992 read with Regulation 3 of the CIS Regulations, 1999. The directors of Alchemist are also held guilty under Section 27(1) of the SEBI Act, 1992, and a monetary penalty is imposed under Section 15D(a).

Full text

Page 2 of 34 unregistered CIS, Noticees allegedly violated provisions of Section 12(1B) of the SEBI Act, 1992 read with Regulation 3 of the SEBI(Collective Investment Scheme) Regulations, 1999 (hereinafter referred to as ‘CIS Regulations, 1999’).

Page 3 of 34 to furnish the particulars demanded by SEBI vide its various letters for the purpose of verifying the said claim.

Page 4 of 34 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 6. A common Show Cause Notice (hereinafter referred to as ‘SCN’) dated February 14, 2020 was issued to the Noticees under the provisions of Rule 4(1) of the Adjudication Rules to show cause as to why an inquiry should not be initiated against the Noticees and penalty, if any, be not imposed on them under the provisions of Section 15D(a) of the SEBI Act, 1992 for the alleged violation by the Noticees. The allegations in the SCN are given below:  SEBI, upon receipt of an anonymous letter on May 25, 2011 alleging that AIRL was operating scheme, plans and mobilizing funds from investors/public, conducted examination in the dealings of AIRL to find out if the activities of AIRL would fall within the ambit of the CIS Regulations or not. On the basis of the said examination, an SCN dated November 20, 2012 was issued to the Noticees alleging that they had been running an unregistered collective investment scheme (CIS) and, therefore, have violated the provisions of Section 11AA read with Section 12(1B) of SEBI Act further read with Regulation 3 of CIS Regulations. Whole Time Member of SEBI (hereinafter referred to as ‘WTM)), after examining the material available on record and the replies submitted by the Noticees, passed an order dated June 21, 2013 (Annexure 3), wherein he inter-alia issued the following directions: “SEBI would initiate prosecution proceedings under section 24 and adjudication proceedings under Chapter VI

Source: SecMarx — sebi:EAD/KS/AS/AO/10490-10494/2020-21. 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.