sebi:WTM/PS/22/EFD/MAY/2016
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Facts / Headnote
Directions issued: abstain from collecting money/launching CIS, wind up schemes and refund investors with returns, provide asset inventory, four-year securities market ban, references to State Government/Police and Ministry of Corporate Affairs, attachment and recovery proceedings.
Provisions invoked
- s. 11A
- s. 24
- s. 19
- s. 12
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- Swar Agrotech India Limited
- Mr. Rajesh Awasthi
- Mr. Pravesh Kumar Karowliya
- Mr. Rohit Gupta
- Mr. Shiv Kumar
Holding
The schemes floated by Swar Agrotech India Limited for sale and development of plots of land constitute a collective investment scheme (CIS) under Section 11AA of the SEBI Act, and the Company and its directors contravened Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations by carrying on the CIS without registration, and Regulation 4(2)(t) of the PFUTP Regulations by illegally mobilizing funds.
Full text
Page 2 of 13 (hereinafter referred to as ‘the CIS Regulations’). The mobilization of funds by Swar Agrotech through its schemes, was also prima facie found to be a fraudulent practice in terms of Regulation 4(2)(t) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practice Relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’).
Page 3 of 13 date fixed, the noticee namely Mr. Rohit Gupta appeared and made oral submissions. He also gave the written submissions dated August 07, 2015, which were taken on record. Vide the said letter, he also provided the contact details of the Company and Mr. Rajesh Awasthi, Mr. Shiv Kumar and Mr. Pravesh Kumar Karowliya. During the course of personal hearing, Mr. Rohit Gupta was also granted liberty to submit the written
Page 4 of 13 the CIS Regulations read with Section 11AA of the SEBI Act. The directors of Swar Agrotech were also alleged to be responsible for the illegal conduct of the business of the Company. The interim order has noted the features of the alleged scheme offered by the Company. The following are the observations from the interim order: “a. Swar Agrotech India Limited (CIN:U01403UP2012PLC048364) was incorporated on January 16, 2012 having its registered office at Shastri Chauraha, Near Hero Honda Showroom, Etawah - 206001 (UP). Mr. Rajesh Awasthi, Mr. Pravesh Kumar Karowliya, Mr. Rohit Gupta and Mr. Shiv Kumar are the Directors of Swar Agrotech. b. The main objects of Swar Agrotech as per the MoA is "to purchase acquire, take on lease or in exchange or any other such lawful manner any area, land, building, structures and turn the same into account to develop the same, and dispose of or maintain the same and to build townships, markets, or such other building or conveniences thereon and to equip the same or any part thereof with all or any amenities or conveniences, such as drainage facilities, electric and to deal with the same in any manner.”
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Source: SecMarx — sebi:WTM/PS/22/EFD/MAY/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.