sebi:WTM/SR/CIS-ILO/WRO/89/11/2014
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Facts / Headnote
Interim directions issued restraining Garima and its past and present Directors from collecting fresh funds, launching new schemes, disposing of assets, and diverting funds; directed to furnish inventory and information sought.
Provisions invoked
- s. 11A
- s. 12
- s. 11
- s. 45
- s. 58A
- s. 620A
Regulations
- Reg. 65
- Reg. 3
- Reg. 4(2)(t)
Parties
- Garima Real Estate & Allied Limited
- Mr. Banwari Lal Kushwah
- Mr. Balkishan Kushwah
- Mr. Shivram Kushwah
- Mr. Banabarilal Lodhi
- Mr. Bijendra Pal Singh
- Mr. Jitendra Kumar
Holding
Garima Real Estate & Allied Limited's schemes for mobilization of funds for purchase and development of land prima facie constitute a 'collective investment scheme' under Section 11AA of the SEBI Act, and carrying on such activity without registration from SEBI is in contravention of Section 12(1B) of the SEBI Act read with Regulation 3 of the CIS Regulations.
Full text
Page 2 of 17 i. Memorandum and Articles of Association (" MoA" and "AoA") of the company as filed with the Registrar of Companies, ii. Details of the past and present directors of the company. Details should contain name, address, PAN and contact details (Email/fax/contact no) of the directors, iii. Brochures/offer document pertaining to the schemes/arrangements, iv. Copies of application forms that are required to be submitted by investors / applicant to participate in Garima's schemes, v. Sample copies of the registration letter/ allotment letter or any other document issued to the investors who subscribe to Garima's schemes, vi. Sample copies of the agreement letter / contract required to be entered into by investor /applicant under Garima's schemes, vii. Details of the scheme wise and year wise amount mobilized by Garima till date along with the number of investors under the schemes, viii. Certified copy of audited financial statement for the last three financial years, ix. Copy of Income Tax Return filed by Garima for the last three financial years, x. Details of the regulatory approvals obtained by Garima, if any, for provision of accidental death/ disability benefits to investor, under Garima's schemes, xi. Details of any other similar scheme(s), if any, floated by group/associates of Garima.
Page 3 of 17 4. Subsequently, on November 28, 2013, a complainant visited SEBI's Indore Local Office and informed about fund raising activity of Garima in their area by assuring high returns through investment in land. The Complainant provided Garima‟s “Career & Rule Book for agents”, which contained various schemes offered by Garima and commission structure to agents for funds mobilized and a copy of registration certificate issued by Garima to an investor. The complainant has also alleged about the fund mobilization activities carried out by the group companies of Garima.
Page 4 of 17 from the directorship with effect from July 20, 2010 and April 15, 2013 respectively. (b) As per the brochures containing the schemes, the plans offered by Garima were Plan B1 (for 5 years), Plan B2 (for 5 years & 6 months), Plan B3 (for 8 years and 4 months), Plan C1 (for 6 years), Plan C2 (for 8 years & 11 months) and Plan C3 (for 10 years and 6 months). Each plan offered investment in plot of land of size from 800 sq. ft. onwards. Garima offers an exit option to the applicants after the expiry of terms of the respective plans with a refund of estimated realizable value as per the opted plans. If the applicant opts to continue with the plan at the end of 15 years(term) investor needs to make payment of specified amount for effecting registration of plot. For instance, the details provided in respect of plan B1 is as under:-
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Source: SecMarx — sebi:WTM/SR/CIS-ILO/WRO/89/11/2014. 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.