sebi:WTM/GM/EFD/33/2017-18
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Facts / Headnote
GBAFL and directors Bettahalli R. Lakshmegowda and Aruna Prasad restrained from collecting money / launching CIS, restrained from securities market for 4 years, restrained from alienating properties, directors to disassociate from other companies for 4 years, reference to Government of Karnataka for repayment; proceedings against Jayanthi Subbarayappa abated on death.
Provisions invoked
- s. 11A
- s. 19
- s. 12
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- Green Buds Agro Farms Ltd
- Bettahalli R. Lakshmegowda
- Aruna Prasad
- Jayanthi Subbarayappa
Holding
The schemes floated by Green Buds Agro Farms Ltd are Collective Investment Schemes operated without SEBI registration in contravention of Section 12(1B) read with Section 11AA and CIS and PFUTP Regulations; GBAFL and directors Bettahalli R. Lakshmegowda and Aruna Prasad are restrained from CIS activity and securities market for 4 years, while proceedings against Jayanthi Subbarayappa stand abated on death.
Full text
Page 2 of 7 not to collect any money from investors from its existing "scheme" or to launch any new schemes; to immediately submit the full inventory of the assets owned by GBAFL out of the amounts collected from the "Unit holders"/investors under its existing "Schemes"; not to dispose of any of the properties or alienate the assets of the existing "Schemes"; not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of GBAFL; to furnish all the information/details sought by SEBI within 15 days from the date of receipt of this Order, including, i. Scheme wise list of investors and their contact numbers and addresses, and ii. PAN numbers of the aforementioned Directors.
Page 3 of 7 6. Even though the company and its two directors failed to respond to the interim order, an opportunity of personal hearing was granted to them in order to comply with the principles of natural justice and the same was scheduled on October 6, 2016. However the noticees failed to appear for the personal hearing. Thereafter, SEBI caused a publication on April 13, 2017 through Deccan Herald and Vijayvani, two local dailies one in English and one in vernacular language respectively regarding the personal hearing scheduled on May 19, 2017. However, even after the paper publication, none of the noticees appeared for the hearing nor submitted any reply or sought any extension. In view of the same, I am convinced that sufficient opportunities have been granted to the noticees and they are not keen to avail any opportunity of hearing in this regard. I further note that the noticees have not even filed any written reply/submission to the interim order cum show cause notice. In view of these facts and circumstances, I deem it appropriate to decide the matter ex-parte on the basis of material available on record.
Page 4 of 7 GBAFL need to be examined carefully as against the four ingredients enlisted in Section 11AA which are the characteristics of a scheme that constitute a CIS:
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Source: SecMarx — sebi:WTM/GM/EFD/33/2017-18. 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.