sebi:WTM/PS/25/IMD-CIS/SRO/MAY/2016

SEBI · SEBI · 2015-07-22 · Prashant Saran, Whole Time Member

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Facts / Headnote

Held the Company's livestock/poultry schemes are unregistered collective investment schemes; directed the Company and directors to wind up schemes and refund investors with due returns within three months with winding-up/repayment report to SEBI, permitted asset sale only for refunds via escrow, restrained noticees from securities market with continued restraint till refunds complete, and warned of police reference and prosecution/adjudication on default.

Provisions invoked

• s. 11A
• s. 24
• s. 19
• s. 12
• s. 11(2)
• s. 45
• s. 58A
• s. 620A
• s. 291
• s. 581B

Regulations

• Reg. 7
• Reg. 68
• Reg. 69
• Reg. 73(1)
• Reg. 71
• Reg. 73
• Reg. 65
• Reg. 3
• Reg. 199
• Reg. 4(2)(t)
• Reg. 70
• Reg. 25
• Reg. 59
• Reg. 70(1)
• Reg. 74A

Parties

• Asurre Agrowtech Limited
• Mr. Sengan Thangappalam
• Mr. Shanmugam Rajendran
• Mr. P. Saravanan
• Mr. R. Devadoss
• Dr. V. Venkataramanujam

Holding

The activities/schemes of Asurre Agrowtech Limited satisfy Section 11AA(2) and are collective investment schemes operated without registration under Section 12(1B) and Regulation 3 of the CIS Regulations, also contravening Regulation 4(2)(t) of the PFUTP Regulations. The Company and its directors were directed to wind up the schemes and refund investors with due returns within three months and were restrained from the securities market.

Full text

Page 2 of 44 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 operation of such schemes. The Company was also alleged to have 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 44  Details of charges created on its assets by the company,  Details of commission paid on amounts mobilized above,  Details of agents along with their addresses, etc.,  Audited Accounts for FY 2014-15.  full details of project development expenses of Rs.19.90 crores mentioned in the financial statements of AAL for FY 2013-14, alongwith the position for FY 2014-2015.  PAN of abovementioned Directors”.

Page 4 of 44 5. Mr. Venkataramanujam V., vide letter dated July 28, 2015, stated that he holds a doctorate in veterinary sciences and retired as a Professor and Head of Dept, of Madras Veterinary College. As he possessed domain knowledge, he had consented to act as the director of the Company on February 14, 2015. He has no knowledge of the proceedings initiated by SEBI prior to the date of his joining the board. He neither was aware nor part of any decision taken by the Company to raise funds as the fund raising activities was prior to his joining as a director of the Company. He submitted that he did not attend any board meeting so far. The noticee stated that he had since resigned. A copy of his resignation letter dated July 21, 2015 was enclosed. The noticee requested full discharge in relation to any proceedings in the future.

Source: SecMarx — sebi:WTM/PS/25/IMD-CIS/SRO/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.