sebi:WTM/PS/66/IMD-CIS/JAN/2015
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Facts / Headnote
Held the company's joint-venture plans are unregistered collective investment schemes in violation of section 12(1B) SEBI Act read with regulation 3 CIS Regulations; directed wind-up of existing CIS and refund with returns within three months plus winding-up/repayment report with trail within fifteen days, restraint on alienation of assets except for refunds, submission of asset/bank/demat inventory, and restraint from accessing/dealing in securities market for four years, without prejudice to prosecution/adjudication.
Provisions invoked
- s. 11A
- s. 11
- s. 24
- s. 19
- s. 12
- s. 58A
- s. 620A
- s. 45
- s. 301
Regulations
- Reg. 65
- Reg. 3
- Reg. 2(1)
- Reg. 4(2)(t)
- Reg. 65(e)
Parties
- Sai Prasad Foods Limited
- Mr. Balasaheb K. Bhapkar
- Mrs. Vandana B. Bhapkar
- Mr. Shashank B. Bhapkar
Holding
The plans/schemes floated by Sai Prasad Foods Limited under the nomenclature joint venture satisfy all four conditions in section 11AA(2) and are therefore collective investment schemes carried on illegally without registration under section 12(1B) read with regulation 3 of the CIS Regulations, requiring wind-up, refund with returns, and consequential restraints on the company and its directors.
Full text
Page 2 of 25 directed the Company and its directors, namely, Mr. Balasaheb K. Bhapkar, Mrs. Vandana B. Bhapkar and Mr. Shashank B. Bhapkar - a. not to collect any more money from investors including under the existing schemes; b. not to launch any new schemes; c. not to dispose of any of the properties or alienate any of the assets of the schemes; d. not to divert any funds raised from public at large which are kept in bank account(s) and/or in the custody of the company.
Page 3 of 25 e) The company presently owns more than 1170 acres of lands in the different States and more than 20 of its projects are underway on these lands.
Page 4 of 25 agreement, as per the prescribed format of the Company. Under the said joint venture system, the Company also undertakes various project and farm development projects and associates of the Company are allotted a unit of project which is based on their participation value as per the different business plans/schemes/projects. g) The joint venture participation business model of the Company is a special combination of the company and the associates, wherein profit is jointly sought for a specific venture without there being any active partnership between the parties. The contribution made by the associates are treated as capital of the joint venture. The refund of the participation amount paid to the co-venture associates is made through the 'Participation Subscription Structure' of the Company. h) The Company is a law abiding company and is always willing to co-operate and participate in the investigation as and when SEBI requires. The Company is complying with the directions issued by SEBI and while doing so is facing certain operational administrative hassles. The Company has already stopped the proposed new projects/on-going projects thereby complying with the orders. i) The Company, till date, has no complaints regarding performing of its commitments with its partners in the Joint Venture. The 'associates' participate in joint-venture on their free will without any misrepresentation or coercion, undue influence etc. If there is any loss in the joint-venture, th
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Source: SecMarx — sebi:WTM/PS/66/IMD-CIS/JAN/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.