sebi:WTM/GM/EFD/46/2017-18

SEBI · SEBI · 2014-02-13 · G. Mahalingam, Whole Time Member

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

Facts / Headnote

Directions issued: joint and several liability to wind up CIS and refund investors within three months, restraint on alienation of assets, market access ban, and ban on holding director/KMP positions in listed companies for four years.

Provisions invoked

• s. 11A
• s. 12

Regulations

• Reg. 65
• Reg. 3
• Reg. 4(2)(t)

Parties

• V3 Infrastructure and Estates Private Ltd.
• V. Santosh Kumar
• V. Madhusudhan
• H. Sireesha

Holding

The noticees operated an unregistered Collective Investment Scheme in contravention of section 12(1B) of the SEBI Act read with regulation 3 of the CIS Regulations, and are directed to wind up the schemes, refund investors, and are restrained from the securities market and from holding director/KMP positions.

Full text

Page 2 of 6 f. to furnish all the information sought by SEBI, vide letters dated February 13, 2014 and March 06, 2014 including, i Copies of all the documents pertaining to the scheme, issued to the investors including the document/agreement executed with the investors, ii Scheme -wise list of investors as on date and their contact numbers and addresses, iii Details of amount mobilized till date, iv Details of amount refunded till date along with the details of mode of payment, duly certified by a CA, v Details of assets held by V3 Infra and its group companies, vi Full details of the Group/Associate Companies of V3 Infra including full inventory of their assets, vii Copies of the registration documents/sale deed in respect of all the land/properties owned/purchased by V3 Infra, viii Financial statements for the last three years duly certified by the statutory auditor, ix Income Tax returns for FY 2012-13, 2013-14, and 2014-15; x Details of fund transfers within group companies and associates and its directors for the year 2012-2013, 2013-2014 and 2014-2015, xi PAN of the company and its directors.

Page 3 of 6 scheduled on October 26, 2016. In reply to the hearing notice, noticee directors Nos. 3 and 4 stated by way of letters dated October 23, 2016 that they were only designated as directors of the company and were not aware of the business activities of the company. They also stated that the noticee director No. 2 was the active director of the company and sought an adjournment in the personal hearing since the said noticee was subject to local judicial proceedings. Accordingly another opportunity of personal hearing was granted to the noticees on July 31, 2017. On behalf of the noticees, Shri Ramanjaneyulu Kothapalli, Company Secretary (hereinafter referred to as "the representative") appeared and submitted that the documents relevant for preparing a reply to the interim order were not available since there were several police cases pending against the noticee directors and the properties in question along with the relevant documents had been seized by the police. The representative also submitted a written reply enclosing an Annexure listing the complaints filed with the police and the amounts claimed from the Noticees. As per the said list, a total of ` 2,12,40,198 (Two crore Twelve lakh forty thousand one hundred and ninety eight rupees) was claimed by the complainants against one or more of the noticee directors. This leads to the strong inference that the amounts raised by the noticees from the investors were much more than the what had been determined in the in

Page 4 of 6 judicial process. In the absence of any reply on merits, I am convinced that the matter may be disposed off based on available records.

Source: SecMarx — sebi:WTM/GM/EFD/46/2017-18. 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.