sebi:WTM/PS/54/CIS/NRO/DEC/2014
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Facts / Headnote
Held KIL's cash down and installment plans are unregistered Collective Investment Schemes; directed KIL and three present directors to abstain from CIS activity, wind up schemes and refund with returns within three months plus filing winding-up/repayment report, with asset-alienation and market-access restraints; imposed 4-year securities market restraint on KIL and three present directors and 2-year restraint on former director Gurwinder Singh.
Provisions invoked
- s. 11A
- s. 11
- s. 19
- s. 12
Regulations
- Reg. 74
- Reg. 73
- Reg. 65
- Reg. 3
- Reg. 199
- Reg. 4(2)(t)
- Reg. 65(e)
Parties
- KEN Infratech Limited
- Mr. Sukhwinder Singh
- Mr. Sukhchain Singh
- Mr. Kuldeep Singh
- Mr. Gurwinder Singh
Holding
KIL floated, sponsored and carried on Collective Investment Schemes as defined in Section 11AA SEBI Act without registration in violation of Section 12(1B) SEBI Act and Regulation 3 CIS Regulations, and its present directors and former director during his tenure are liable. KIL and directors were directed to wind up schemes, refund investors with returns, and were restrained from the securities market.
Full text
Page 2 of 18 letter (received by SEBI on September 19, 2011) replied to the letter of SEBI and submitted the information with regard to the details of payment plans for its schemes, application form, agreement between the Company and the investor, details of the amount mobilized, terms and conditions of the Company mentioned on the plot registration letter as well as in the agreement and also submitted that it has mobilised about ₹ 4.5 crore in cash down payment plan and about ₹ 3 crore in installment payment plan and has not purchased the land yet. It also submitted that it will purchase the land at the earliest.
Page 3 of 18 under the SEBI Act and CIS Regulations, including directions for winding up of such plans/schemes in terms of Regulation 73 and formulation of the scheme of repayment in terms of Regulation 74 of the CIS Regulations, should not be taken against them.
Page 4 of 18 g. The plots to be sold are on the basis of pricing of land based on its location and sizes. The land units are actual pieces of land and are not fungible. There are no fixed plans/ schemes for selling land. h. The specification of the land sold are given in the agreement/ sale deeds and there will be actual transfer/ sale of land. i. The Company acts as a seller in the ordinary course of business. No ownership rights are left with the Company once sale deed is executed. The owner has the freedom to use the land in any manner he thinks appropriate. j. The Company does booking of plot and units in advance and takes booking amount to ensure the sincerity/ interest of the customers and execute an agreement with customers to ensure safety of their deals/ money. This agreement do provide for exit options. Once the plots are arranged, sale deeds will be executed and sale proceeds will be booked in the books of accounts. k. The money received from intending purchasers is as advance for purchase of plot/ unit which is a common practice in ‘real estate’ industry. There is no expectation of profit sharing. l. The Company is not managing any schemes on behalf of the customers. It takes its own decisions where customers have no role to play. m. There is no scheme offering any fixed return. n. Company was in possession of land measuring 12.04 acres of land, out of which for 9.025 acres of land, an agreement for sale has been established. o. The Company has never collected ₹ 7
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Source: SecMarx — sebi:WTM/PS/54/CIS/NRO/DEC/2014. 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.