sebi:WTM/PS/40/EFD/MAY/2016
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Facts / Headnote
Directions issued: winding up of CIS and refund of investor money within three months, inventory of assets, four-year securities market ban, and referral to MCA and police authorities.
Provisions invoked
- s. 11A
- s. 24
- s. 19
- s. 12
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- Garima Homes and Farm Houses Limited
- Mr. Shivram Kushwah
- Mr. Banabarilal Lodhi
- Mr. Balkishan Kushwah
- Mr. Banwari Lal Kushwah
- Mr. Bijendra Pal Singh
- Mr. Jitendra Kumar
Holding
The schemes floated by Garima Homes and Farm Houses 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 read with Regulation 3 of the CIS Regulations by operating without registration, and Regulation 4(2)(t) of the PFUTP Regulations.
Full text
Page 2 of 16 Schemes) Regulations, 1999 (hereinafter referred to as ‘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 (hereinafter referred to as ‘PFUTP Regulations’).
Page 3 of 16 Singh, Mr. Shivram Kushwah, Mr. Balkishan Kushwah and Mr. Jitendra Kumar had returned undelivered. Thereafter, SEBI vide its letter dated April 10, 2015, attempted to deliver the interim order to the Company at its head office in Delhi, with an advice to deliver the order to the directors of the Company. However, the said letter could not be delivered as the Company was not found operating at the address available. Before proceeding further, SEBI intimated the passing of the interim order vide the public notice in various newspapers inter alia ‘Navbharat Times’, ‘Charhdikala’ and ‘Times of India’ on April 18, 2015.
Page 4 of 16 submitted the written submissions dated January 19, 2016, which were taken on record. 7. Thereafter, as the directors of the Company had not entered their appearance for the personal hearing, one more opportunity of personal hearing was granted to these on February 29, 2016. The date of hearing was also communicated vide the public notice in the newspapers namely ‘Dainik Bhaskar’, ‘Rajasthan Partrika’, ‘Navbharat Times’ and ‘Times of India’ all dated February 18, 2016. The directors of the Company were advised that in case they fail to appear for the personal hearing before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of the material available on record. On the date fixed, no one had appeared for the directors of the Company. Considering that reasonable opportunity to the directors had already been afforded for making submissions in the matter, I am inclined to proceed further with the matter, on the basis of merits of the case.
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Source: SecMarx — sebi:WTM/PS/40/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.