sebi:WTM/AB/IMD-CIS/09/2021-22
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Facts / Headnote
Held the Crayon Capital Art Fund Scheme 1 was an unregistered collective investment scheme in violation of law and directed winding up, refund of Rs. 1,04,31,750 to 112 remaining investors with interest, and filing of auditor-certified winding up and repayment reports.
Provisions invoked
- s. 11A
- s. 11
- s. 19
- s. 12
- s. 28A
- s. 24
- s. 45
- s. 58A
- s. 620A
- s. 67(3)
- s. 67
- s. 2(1)
- s. 67(1)
Regulations
- Reg. 65
- Reg. 3
- Reg. 2(1)
- Reg. 2
- Reg. 2(h)
- Reg. 26
- Reg. 32
- Reg. 2(1)(t)
- Reg. 2(z)
- Reg. 21(1)(i)
- Reg. 21(1)(A)
Parties
- Crayon Capital Limited
Holding
The scheme operated by Crayon was in the nature of a collective investment scheme and was floated without SEBI registration in contravention of Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS Regulations, warranting directions under Sections 11 and 11B read with Regulation 65.
Full text
Final Order in the matter of Crayon Capital Limited Page 1 of 32 WTM/AB/IMD-CIS/09/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA FINAL ORDER
Final Order in the matter of Crayon Capital Limited Page 2 of 32 3. Crayon vide its letter dated January 29, 2007, filed its reply and stated that it is a partnership firm comprising of Mr. Gaurav Karan and Mr. Amit Vadehra and the newspaper articles do not reflect the composition or structure of the ‘art fund’ accurately. Crayon also inter alia submitted as under: a. The ‘Crayon Capital Art Fund’ (hereinafter referred to as ‘the Crayon Fund’) is a trust formed under the Trusts Act, 1881 vide trust deed dated November 10, 2006 and is sponsored by Crayon (an Asset Management firm) for operating the schemes. b. It has launched only one scheme i.e. ‘The Crayon Capital Art Fund Scheme 1’, which was close ended and the offering period was November 15, 2006 to December 15, 2006. The term of the said scheme is 36 months, following which its assets shall be liquidated and proceeds shall be distributed pro rata amongst its investors. The minimum investment in the scheme is Rs.10,00,000 and in multiples of Rs.1,00,000 afterwards. The corpus of such schemes shall comprise of amounts raised by issuing 'units' to the investors. c. It was also said that the corpus of every scheme shall be held in trust for the benefit of the investors by the 'art fund' and shall be utilized for investing and dealing in art works with a view to maximizing returns from such investment. d. It has 474 investors and total amount collected in scheme is Rs.60.57 Crores.
Final Order in the matter of Crayon Capital Limited Page 3 of 32 proceeds of subscription money, is covered under the definition of 'scheme property' as defined in Regulation 2(z) of the CIS Regulations.
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Source: SecMarx — sebi:WTM/AB/IMD-CIS/09/2021-22. 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.