sebi:WTM/RKA/WRO/48/2013

SEBI · SEBI · 2011-10-22 · Rajeev Kumar Agarwal, Whole Time Member

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Facts / Headnote

Directions issued under sections 11 and 11B of the SEBI Act read with regulations 65 and 73 of the CIS Regulations: Orient and its directors directed to wind up the scheme and repay income/returns or transfer one teak tree per unit within three months; failure would trigger prosecution under section 24, adjudication under Chapter VI, references to State Government/police, reference to Ministry of Corporate Affairs for winding up, and attachment/recovery under section 28A; Orient, Mr. Darshanbhai Arvindbhai Shah, Shri Brahm Dev Amarnath Shukla and Mr. Dilpesh V. Shah restrained from accessing the securities market for three years; SCN disposed of as against Advisory Board members.

Provisions invoked

• s. 11A
• s. 11
• s. 24
• s. 19
• s. 11(1)
• s. 12
• s. 11(2)
• s. 28A

Regulations

• Reg. 74
• Reg. 73
• Reg. 65
• Reg. 3
• Reg. 5
• Reg. 2(2)

Parties

• Orient Resorts (India) Private Limited
• Mr. Darshanbhai Arvindbhai Shah (former Managing Director)
• Shri Brahm Dev Amarnath Shukla
• Mr. Dilpesh V. Shah
• Dr. V.J. Patel
• Shri R. S. Bhatt
• Shri B. K. Zala
• Shri Sanat Mehta
• Shri Hasmukh Shah

Holding

Orient Resorts (India) Private Limited's Vanashree Teak Bumper Profits Scheme was held to be a collective investment scheme that had to be registered under the CIS Regulations, and Orient and its persons in charge were held liable for contravening section 12(1B) of the SEBI Act and regulations 3, 5, 73 and 74 of the CIS Regulations. Directions were issued requiring winding up of the scheme and repayment to investors within three months, with a three-year securities market ban on Orient and three individuals.

Full text

2 within such time. Therefore, another reminder was issued by SEBI to it, on September 27, 2011. It was also informed to Orient that non-compliance would tantamount to the violation of the provisions of section 11(2)(i) of the SEBI Act.

3 6. Orient, vide its letter dated December 21, 2012, submitted its reply to the SCN. An opportunity of personal hearing was granted to the noticees on July 11, 2013. Mr. J. J. Bhatt, advocate, Shri Brahm Dev Amarnath Shukla, Managing Director and Mr. Darshanbhai A. Shah appeared on the behalf of the Orient and made submissions. Liberty was granted to the noticees to file written submission in the matter. Orient vide letter dated July 19, 2013 filed its written submissions in the matter.

4 the trees which had then grown to only 10-15% its actual size, it would have acted against the interest of the unit holders. j. As Orient was new to teak plantation, it decided to seek the expert advice of specialists in the area of teak plantation. The members of the Advisory Board were orally requested to be advisors on honorary basis in terms of Board Resolution dated February 30, 1992. Once the scheme was established and refunds were issued, the Advisory Board got dissolved. k. Now the teak trees are fully grown up ready for cutting but under Gujarat Government Circular no. TRS 2060-9863-A3 dated February 11, 1961 permission is required from the Divisional Forest Officer (DFO) for cutting those trees even if they are in private lands. Vide letters dated April 15, 2012 and July 15, 2013 Orient has requested for permission to cut down the teak trees. Permission is yet to be received from the DFO. After cutting the trees it will be able to refund the agreed monies to the investors. l. In a 2013 judgment, the District Consumer Disputes Redressal Forum, Bharuch, has ordered Orient to hand over possession of 1 teak tree per unit to the 2 complainants after deduction of expenses incurred by Orient.

Source: SecMarx — sebi:WTM/RKA/WRO/48/2013. 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.