sebi:WTM/PS/61/IMD-CIS/NRO/OCT/2015
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Facts / Headnote
Adel Landmarks Limited and its present directors (Rakesh Kumar Gupta, Sumit Bharana, Arvind Kumar Birla) and certain former directors (Rashmi Bharana, Sanjay Chawla, Manisha Bharana) held liable for operating a Collective Investment Scheme without SEBI registration; restrained from securities market for 4 years (with extension until full refund), directed to wind up schemes and refund investors within 3 months, and proceedings against 11 former directors who resigned before October 2011 disposed of.
Provisions invoked
- s. 11A
- s. 24
- s. 19
- s. 12
- s. 9A
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
- Reg. 65(e)
Holding
The pre-booking of plots scheme operated by Adel Landmarks Limited constitutes a Collective Investment Scheme under section 11AA of the SEBI Act, 1992, and the Company and its directors during the relevant period contravened section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations by mobilizing funds without registration from SEBI.
Full text
Page 2 of 24 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) vide an interim ex- parte Order dated June 05, 2014 (hereinafter referred to as “the interim order”), prima facie observed that the features of “purchase and development of future land” offered by the company, Adel Landmarks Limited (hereinafter referred to as the “Company” or “ALL”) is a Scheme within the ambit of ‘Collective Investment Scheme (CIS)’ as defined under section 11AA of the SEBI Act, 1992.As the Company was allegedly carrying on CIS activities without obtaining registration from SEBI, the Company was alleged to have contravened the provisions of section 12 (1B) of the SEBI Act and regulation 3 of the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as “the CIS Regulations”).
Page 3 of 24 • to furnish all the information/details sought by SEBI within 15 days from the date of receipt of this order, including, i. Details of amount mobilized and refunded till date, ii. Scheme wise list of investors and their contact numbers and addresses, and iii. PAN of the aforementioned Directors.”
Page 4 of 24 (e) The Company through its subsidiaries/group companies holds substantial land parcels before the launch of project and its constituents/group/associate companies had already the land registered in their favour and the land was to be developed as residential plots/units. The details of land owned by various companies were attached with the reply. It was therefore wrong to suggest that the land was acquired through the amount collected from investors. (f) The land owning entities have applied to the DTCP for license, which involves change of land use and development of units/plots. (g) Theregistration amount was accepted for purchase of residential plots/units in the upcomingprojects for which license was already obtained or the license was under process. There was no scheme, where money was accepted without land being unavailable with the Company. (h) As the Company was not certain about the timeline for grant of license by the Govt. authorities, it accepted conditional allotments. (i) The Company contended that it is incorrect to conclude that monies were collected and pooled for the purpose of purchasing land as in the instant case, the Company owned the land parcels and licenses and applied for requisite fees for technical diligence. As there was an apprehension that in case the Company is not able to get the license, the amounts had to be refunded with compensation to protect the financial interest of the customers. According to the Company, the reasoning ma
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Source: SecMarx — sebi:WTM/PS/61/IMD-CIS/NRO/OCT/2015. 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.