sebi:WTM/RKA/ERO-CIS/19/2013
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Facts / Headnote
Directions issued: wind up collective investment schemes and refund monies within three months; failure to comply triggers prosecution under section 24, adjudication under Chapter VI, market access prohibition, reference to State Government/local police, and reference to Ministry of Corporate Affairs for winding up.
Provisions invoked
- s. 11B
- s. 11A
- s. 24
- s. 12
Regulations
- Reg. 65
- Reg. 3
Parties
- M/s Saradha Realty India Ltd.
- Mr. Sudipta Sen
Holding
The schemes/arrangements of M/s Saradha Realty India Ltd. satisfy all four conditions of section 11AA of the SEBI Act and constitute a 'collective investment scheme', and the noticee contravened section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations by launching such schemes without obtaining a certificate of registration from SEBI.
Full text
Page 2 of 12 Regulations’), SEBI its vide numerous letters, particularly those dated June 03, 2010, July 14, 2010, August 13 , 2010 , October 12, 2010 and November 03, 2010 advised the noticee to submit certain documents and information with respect to its schemes, details of funds mobilized from investors under the said schemes and manner of utilisation thereof, etc. The noticee, however, did not furnish the desired information in terms of the notice issued to it. It was noted that the noticee had furnished voluminous and irrelevant information. On examination of the information furnished by the noticee and information received from EOIC, Government of West Bengal it was noted that:-
Page 3 of 12 section 12(1B) thereof and regulation 3 of the CIS Regulations. In view of the same, a show cause notice (SCN) dated December 15, 2011 was issued to the noticee asking it to show cause as to why suitable action as contemplated therein should not be initiated against it for the violation of section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations.
Page 4 of 12 purchaser gets physical possession of respective flat upon payment of balance consideration and only thereafter he can have day to day control over the property. Even otherwise as soon as the noticee receives money from the purchaser, the purchaser gets day to day control on the property. (j) It is denied that the part of consideration paid by the prospective purchaser is unidentifiable. There is no question of managing money on behalf of the purchaser in as much as the ownership in the money gets transferred to the owner and purchaser gets ownership of the property.
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Source: SecMarx — sebi:WTM/RKA/ERO-CIS/19/2013. 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.