sebi:WTM/MPB/EFD-1-DRA-3/07/2019

SEBI · SEBI · 2015-03-17 · Madhabi Puri Buch, 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

SRREBSL directed to wind up its unregistered collective investment schemes and refund Rs. 12,01,89,105 to 383 investors within three months; directors held jointly and severally liable for refunds during their tenure; directors restrained from accessing the securities market; recovery proceedings to be initiated in case of non-compliance.

Provisions invoked

• s. 11B
• s. 11A
• s. 19
• s. 12
• s. 45
• s. 58A
• s. 620A

Regulations

• Reg. 65
• Reg. 3
• Reg. 4(2)
• Reg. 4(2)(t)
• Reg. 65(c)
• Reg. 65(d)

Holding

SRREBSL's schemes for 'purchase and development of plot/land' constituted an unregistered collective investment scheme under Section 11AA of the SEBI Act, violating Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations, and the directors who sponsored/caused the schemes are jointly and severally liable to refund the amounts collected during their respective tenures.

Full text

Order in the matter of Shri Ram Real Estate and Business Solution Limited Page 2 of 31 1. Shri Ram Real Estate and Business Solution Limited (hereinafter referred to as “SRREBSL”/ “the Company”) is a company incorporated on September 08, 2008 with CIN: U70102MP2008PLC021116. Its registered office is at 38, Dal Mill, By Pass Road, Shanti Apartment, Karond, Bhopal, Madhya Pradesh.

Order in the matter of Shri Ram Real Estate and Business Solution Limited Page 3 of 31 5. In view of the prima facie findings on the violations, the following directions were issued in the said interim order dated March 17, 2015 with immediate effect-  not to collect any fresh money from investors under its existing schemes;  not to launch any new schemes or plans or float any new companies to raise fresh moneys;  to immediately submit the full inventory of the assets including land obtained through money raised by SRESBL;  not to dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by SRESBL;  not to divert any funds raised from public at large which are kept in bank account(s) and/or in the custody of SRESBL;  to furnish all the information/details sought by SEBI vide letters dated July 03, 2013, December 04, 2013 and January 21, 2014 within 15 days from the date of receipt of this order, including: i. Details of amount mobilized and refunded till date, ii. Scheme wise list of investors and their contact numbers and addresses, iii. Details of commission paid on amounts mobilized above, iv. Details of agents along with their addresses, etc., v. Audited Accounts for the last financial year and vi. PAN of aforementioned Directors.

Order in the matter of Shri Ram Real Estate and Business Solution Limited Page 4 of 31 on a specific request made in that regard.

Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-3/07/2019. 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.