sebi:WTM/GM/EFD/Misc./3/2017-18

SEBI · SEBI · 2016-07-02 · G Mahalingam, Whole Time Member

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Facts / Headnote

Representations dated May 9, 2016 and July 2, 2016 for extension rejected; entities directed to wind up existing collective investment scheme and refund as per order dated April 5, 2016 within three months, failing which recovery proceedings to be initiated

Parties

• Utkarsha Plotters & Multi Agro Solutions India Limited
• Mr. Mitharam Chhagan Gaurav
• Ms. Dipali Mitharam Gaurav
• Mr. Pravin Chhagan Gurav

Holding

The applications for extension of time up to five years to refund investors were rejected and Utkarsha Plotters & Multi Agro Solutions India Ltd. and its three directors were directed to wind up the existing collective investment scheme and complete refunds per the April 5, 2016 order within three months, failing which recovery proceedings shall be initiated.

Full text

Order in the matter of Utkarsha Plotters & Multi Agro Solutions India Ltd. Page 2 of 6 of the company and make payments to the investors in a short period of three months. In view of the above, they sought 3 years’ time to make refunds, i.e. up to April 04, 2019. Subsequently, vide letter dated July 02, 2016, the entities urged that they may be granted five years’ time to comply with the directions in the order. The additional submissions made by the entities in this regard are as under: a. That pursuant to the passing of ex-parte ad-interim order dated January 14, 2015 in the matter, they have stopped collecting money from the public. Further, after the SEBI order, a large number of investors approached them for refunds even before maturity date, which was complied with. b. After receipt of final order, the Board of Directors (BoD) of the company held meetings on April 15, 2016 and May 6, 2016. During the meetings the directors were informed that, with great difficulty, they were able to sell two units of row houses at a nominal profit. The amount realised was around ` 36 lakh. c. The company has appointed a panel of real estate agents to dispose of the assets of the company. The progress of the sale of assets of the company is tracked by BoD on a monthly basis. d. The disposal of assets at the fair market price and as per approved valuer’s estimates has become quite cumbersome and impossible due to the following factors:  Global recession has adversely impacted the real es

Order in the matter of Utkarsha Plotters & Multi Agro Solutions India Ltd. Page 3 of 6 3. Simultaneously, the company also filed an appeal (Appeal No. 221 of 2016) against the aforesaid SEBI order before the Hon’ble Securities Appellate Tribunal (SAT). The counsel for the entities did not contest the appeal on merits before SAT and submitted that they are desirous of implementing the order within the extended time sought from SEBI vide the aforesaid representations dated May 9, 2016 and July 2, 2016. Accordingly, SAT vide order dated August 26, 2016 disposed of the appeal as withdrawn and directed SEBI as follows:

Order in the matter of Utkarsha Plotters & Multi Agro Solutions India Ltd. Page 4 of 6 fallen due. He furnished list of property acquired from the funds collected from the investors and requested for time of 4 years to make the refund as directed in the order. The entity was asked to submit a repayment plan of a shorter duration. He was also advised to furnish evidence of refund (bank statement) along with certificate of chartered accountant and details of assets of the directors of the company. Vide e-mail dated July 25, 2017 the company has furnished an updated "optional return paid list" and copy of bank account statements. As per this list, money has been refunded to 6,413 investors. However, it is noted from the list that majority of such transfers are in cash.

Source: SecMarx — sebi:WTM/GM/EFD/Misc./3/2017-18. 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.