sebi:WTM/PS/18/CIS-NRO/JUNE/2015
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Facts / Headnote
Directions issued: abstain from collecting money/launching CIS, restrained from securities market for four years, wind up schemes and refund investors within three months, provide asset inventory, with consequences for non-compliance including references for criminal proceedings and winding up.
Provisions invoked
- s. 11A
- s. 11
- s. 19
- s. 12
- s. 24
- s. 58A
Regulations
- Reg. 65
- Reg. 3
Parties
- Capacious Farming Pvt. Limited
- Mr. Gaurav Yadav
- Mr. Gurbakhsh Singh
- Ms. Narmin Kaur Yadav
Holding
Capacious Farming Pvt. Limited and its directors operated a collective investment scheme without obtaining registration from SEBI, in contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations. Directions were issued against the company and all three directors, including a four-year restraint from the securities market and mandatory winding up and refund of investor monies.
Full text
Page 2 of 20 2. Capacious vide its letters dated March 13, 2013, requested for time to reply to the letter of SEBI. Vide another letter dated May 07, 2013, Capacious replied to the SEBI letter and submitted as under:
Page 3 of 20 (hereinafter referred to as 'SCN') dated May 12, 2014 was issued to Capacious and its directors namely Mr. Gaurav Yadav, Mr. Gurbakhsh Singh and Ms. Narmin Kaur Yadav (hereinafter collectively referred to as 'noticees') advising them to show cause as to why appropriate directions under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') should not be issued against them for the alleged violations. The SCN indicated that the noticees may send their replies within 21 days from the receipt of the SCN failing which it shall be presumed that noticees do not have any explanation to offer and that the proceedings will be concluded ex parte on the basis of the material available on record.
Page 4 of 20 Company has no share in the profit of the purchaser and the possession of the animal is also handed over to the purchaser. b. Capacious had started selling the animals on installments, however, it had not received any response to the same and accordingly the planning was dropped. It sells animals after taking one time payment from the purchasers on execution of a specific agreement between the Company and the purchaser. In case of one time payment, the only purpose of stating the cost of animals after four year, in 'scheme brochure' is to show the purchaser that there are immense profits in the business of sale and purchase of animals, so that the customers are motivated to purchase the animals from the Company. c. The word 'co-owner' in the sale agreement refers to the Company with whom Capacious deals.
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Source: SecMarx — sebi:WTM/PS/18/CIS-NRO/JUNE/2015. 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.