The rapid real estate development in India has been
rather fascinating and has enticed many to participate in the exuberance, where
we have witnessed skyline of cities changing.
The growing appetite for risk supported by rise in income
levels has also encouraged many to gain from this, as many do indulge in collective
investment schemes of real estate companies to share the benefits on a
pro-rata basis. But, you got to be careful, with whom you are dealing and not
get lured by tall claims & fancy propositions.
Recently suspecting frauds in projects being launched by
numerous real estate developers, capital markets regulator - Securities and
Exchange Board of India (SEBI) has initiated a probe for possible violations of
Collective Investment Scheme (CIS) regulations.
The capital market regulator has been flooded with
complaints of investors being duped by real estate companies promising huge
returns in projects proposed to be developed from scratch through public money,
thereby prompting it to launch probe against about 50 to 60 such developers.
The regulator is also investigating, prima facie whether
these real estate companies are registered as CIS with them.
What is Collective
Investment Scheme ..?
t is noteworthy that, in such a scheme the fraud is
engineered in such a way that companies lure investors into putting in their
money for purchase of land and thereafter for development of projects and
promise them huge returns at a later stage.
The firms’ even offer to buy back the properties with
considerable appreciation to the original investment; but the investors often
find being betrayed after having put in some money and small initial returns
received, in certain cases.
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