sebi:WTM/GM/EFD/42/2017-18
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Facts / Headnote
Directions issued against noticees to wind up CIS and refund investors
Provisions invoked
- s. 11A
- s. 12
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- RBN Infrastructure India Ltd.
- Ashok Kumar Pal
- Ram Niwas Pal
- Ranveer Singh Baghel
- Ram Rup Baghel
- Anil Kumar Baghel
- Ram Niwas Baghel
- Sarvesh Singh Baghel
Holding
The activities of RBN Infrastructure India Ltd. and its directors constituted an unregistered Collective Investment Scheme in violation of section 12(1B) read with CIS Regulations, and they were directed jointly and severally to wind up the schemes and refund investors with returns within three months.
Full text
Page 2 of 5 section 11AA of the SEBI Act, 1992. Accordingly, the following directions were passed against the Noticees (including the directors and promoters of RBN) : " a. not to collect any fresh moneys from investors from its existing scheme; b. not to launch any new scheme/plan or float any new companies/firm to raise fresh moneys; c. not to dispose of any of the properties or alienate the assets of the existing scheme; d. not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of the company; e. to immediately submit the full inventory of the assets owned by RBN Infrastructure out of the amounts collected from the "customers"/investors under its existing schemes; f. to furnish all the information sought by SEBI, including, i. scheme wise list of investors and their contact numbers and addresses, ii. the details of amount mobilized and refunded till date, iii. the details of amount refunded till date along with the details of mode of payment, duly certified by the company's auditors, iv. PAN of the past directors of the company viz. Mr. Ram Niwas Baghel and Mr. Sarvesh Singh Baghel, v. all documents/information and clarifications sought by SEBI, vide letters dated February 14, 2014, July 30, 2014 etc. and not yet submitted vi. to provide explanation regarding the denial of certification by the Auditor, as detailed in paragraph No. 4.6
Page 3 of 5 based on a consideration of available documents, concluded that the "so -called 'plot booking' is a mere ruse created to show that the company is doing land transactions." Significantly the auditors viz. Gaurav Ashok Jain & Associates, have denied having signed the balance sheets of RBN as on March 31, 2012 and March 31, 2013 thereby raising serious questions on the genuiness of financial statements of the company for 2011-12 and 2012-13.
Page 4 of 5 provided to refute the findings in the interim order, I am compelled to reiterate that the activities of the noticees constitute a Collective Investment Scheme in terms of section 11AA of the SEBI and the same has been carried out by the noticees without seeking a registration from SEBI thereby contravening section 12(1B) of the SEBI Act read with regulation 3 of the CIS Regulations. I also note that in terms of regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective investment scheme by any person without obtaining the necessary registration from SEBI. The aforesaid legal provisions have already been discussed in detail in the
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Source: SecMarx — sebi:WTM/GM/EFD/42/2017-18. 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.