sebi:WTM/PS/23/EFD/MAY/2016
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Facts / Headnote
Directions issued: Company and directors restrained from collecting money or launching CIS; directed to wind up schemes and refund investors within three months; assets inventory to be provided; directors restrained from securities market for four years; SEBI to refer matter to State Police, Ministry of Corporate Affairs, and initiate 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 Agroteak and Housing (India) Private Limited
- Mr. Rajesh Awasthi
- Mr. Pravesh Kumar Karowliya
- Mr. Raghuvir Singh
- Mr. Dharmendra Kumar Pal
- Mr. Jitendra Kumar Porwal
- Mr. Shiv Kumar
Holding
The schemes floated by Swar Agroteak and Housing (India) Private Limited satisfy all four conditions of Section 11AA(2) of the SEBI Act and constitute a Collective Investment Scheme, which the Company and its directors carried on without registration in contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations. The directors, including those who resigned, were held liable for the illegal fund mobilisation.
Full text
Page 2 of 13 Schemes) Regulations, 1999 (hereinafter referred to as ‘the CIS Regulations’). The mobilization of funds by Swar Agroteak 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 2015 replied to the interim order. Mr. Jitendra Kumar Porwal in his letter submitted that he had resigned from the Company, which was accepted on November 20, 2011. He also submitted that the details as asked in the interim order are not available with him.
Page 4 of 13 alleged that the plans/ schemes operated by the Company are in the nature of CIS and that the Company was offering these schemes without obtaining the registration from SEBI, in contravention of the provisions of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations read with Section 11AA of the SEBI Act. The directors of Swar Agroteak 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
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Source: SecMarx — sebi:WTM/PS/23/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.