Saradha
Realty India & its Managing Director
Mr. Sudipta Sen have been directed to wind up the company’s collective
investment scheme (CIS).
Market
regulator SEBI also instructed the firm to pay back investors according to the
offer terms within three (3) months.
The
regulator SEBI cautioned that failure to do so would result in prosecution
proceedings for fraud, cheating, criminal breach of trust and misappropriation
of public funds.
The
Firm and its Managing Director have been barred from accessing the capital
market.
SEBI
said Saradha’s scheme satisfied all the conditions of a CIS.
The
Saradha Realty India received advance money from Rs. 10,000 to Rs. 1 lakh for
allotting a piece of land or / flat allotted under its schemes.
The
scheme tenor varied between 15 months
and 120 months. Investors could also opt for refund of cash with average
returns between 12% and 24%.
SEBI
said the land / flat allotted was not pre-determined or / identified and
investors received them only at the time of final allotment.
In
addition, investors did not have day-to-day control over the scheme as their
contribution was being managed by Saradha Realty India.
Saradha
Realty India was given multiple opportunities of personal hearing but did not
furnish any details.
The
Real estate company denied all the charges & allegations in the SEBI
show-cause notice that were primarily related to CIS.
The
Saradha Realty India also sent voluminous data and documents in over 200 boxes
to SEBI’s Kolkata office, which the regulator found to be irrelevant and
extraneous.
Further,
Saradha also contended that it was unable to locate its investors and identify
the money due to them because of unscrupulous staff and brokers.
The
firm also said its data was stored in servers at Boston & under the control
of the staff and brokers.
SEBI
said it was passing the order as no cogent evidence came in support of
Saradha’s claims and no representative turned up on the appointed date, April
2, 2013 .
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