sebi:WTM/PS/181/IMD/WRO-RLO/MAR/2016
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Facts / Headnote
Directions issued: Company and directors restrained from collecting money/launching CIS, directed to wind up schemes and refund investors with interest, restrained from accessing securities market for 4 years, assets not to be alienated except for refunds, certificate of completion from peer-reviewed CAs, references to MCA, without prejudice to prosecution/adjudication proceedings.
Provisions invoked
- s. 11A
- s. 24
- s. 19
- s. 12
- s. 11(2)
- s. 45
- s. 58A
- s. 620A
- s. 291
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- Vee Realties India Limited
- Mr. Panchulal Pandhare Motiram
- Ms. Rekha Neware
- Mr. Nilesh Keshorav Gajbhiye
- Mr. Buddhadas Premdas Ramteke
- Mr. Bhikam Chand Sahu
- Mr. Ganeshram Verma
- Mr. Ramesh Kumar Sahu
- Mr. Panna Lal Sahu
- Mr. Kamlesh Verma
- Smt. Gayatri Verma
- Mr. Udaksh Kumar Verma
- Mr. Ved Prakash Verma
Holding
The fund mobilization schemes of Vee Realties India Limited constitute a Collective Investment Scheme under section 11AA of the SEBI Act, and the Company and its directors contravened section 12(1B) of the SEBI Act, regulation 3 of the CIS Regulations and regulation 4(2)(t) of the PFUTP Regulations by operating such schemes without registration from SEBI. Directions were issued requiring winding up of the schemes, refund of investor monies with interest, market access restrictions for 4 years, and other injunctive relief.
Full text
Page 2 of 26 1. Securities and Exchange Board of India (“SEBI”), vide ex-parte interim Order dated December 02, 2014 (“the interim order”), prima facie observed that the fund mobilization activity of the company, Vee Realties India Limited (“the Company” or “VRIL”) is a Collective Investment Scheme in terms of section 11AA of the Securities and Exchange Board of India Act, 1992 (“the SEBI Act”). It was alleged that the Company did not obtain a certificate of registration as required under section 12(1B) of the SEBI Act and regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 (“the CIS Regulations”) prior to the launch and operating such schemes and also contravened regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 ("the PFUTP Regulations").
Page 3 of 26 4. The interim orders sent to the noticees were delivered. Thereafter, Mr. Inderjit Paul, Advocate, vide letter dated December 22, 2014 wrote to SEBIstating to represent the Company and sought for time of 15-20 days so that he could collect appropriate material for filing the reply. This request was allowed by SEBI.
Page 4 of 26 (j) The poor require savings for both production and consumption purposes. Production saving may be of three types – short term (upto 15 months), medium term (from 15 months to 5 years) and long term (for periods above 5 years). (k) The Company has discharged its obligations by conducting audit under the Companies Act, 1956 as well as Income Tax Act, 1961, filing of returns with the Income Tax Department as well as RoC, maintaining books of accounts as per Accounting standards and compliances made with the respective authorities. (l) The photocopies of audit report, income tax return, TDS return and returns with RoC were already placed with SEBI. (m) The payment plans of the Company are totally based on micro-saving only for the upliftment of poor to help them making an asset in the shape of their shelter or land for agriculture and its activities are not subject to the provisions of the SEBI Act and CIS regulations. SEBI should appreciate the allegation that the Company is involved in activities of collecting monies from general public under guaranteed returns in future is not according to the facts and proposition of law. (n) The Company also stated that due to a number of bogus criminal proceedings launched against Mr. KamleshVerma (a former director) of the Company, most of the documents were in the possession of the local police at Rajnandgaon (Chhattisgarh). (o) The Advocate also mentioned that he had applied to the police station for release of documents a
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Source: SecMarx — sebi:WTM/PS/181/IMD/WRO-RLO/MAR/2016. 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.