SEBI cracks the whip, bans ‘buffalo purchase’ ponzi scheme

Sai Multi Services was collecting money from the public under its scheme for buying buffaloes and the investors were assured guaranteed monthly return by selling the milk produced from these buffaloes.

By: PTI | New Delhi | Updated: May 11, 2016 12:08 am
The official spokesperson of the Lodha Group said in an email that the company is not aware of any enquiry by Sebi. Sai Multi Services was collecting money from the public under its scheme for buying buffaloes and the investors were assured guaranteed monthly return by selling the milk produced from these buffaloes.

Pulling the plug on a ‘buffalo purchase’ illegal investment plan that promised guaranteed returns by selling milk, Sebi imposed a 4-year ban on Sai Multi Services and ordered it to refund investors’ money.

Besides the company, its proprietor Sanjay B Tenginkai has also been barred from the capital markets.

The Securities and Exchange Board of India (Sebi) has found that money-pooling activity by the company is in the nature of collective investment scheme (CIS) and was run without requisite approval from the regulator.

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Sai Multi Services was collecting money from the public under its scheme for buying buffaloes and the investors were assured guaranteed monthly return by selling the milk produced from these buffaloes.

The company had collected around Rs 4.2 crore from the investors, according to the details.

In the order passed by Sebi Whole-Time Member Prashant Saran, the regulator restrained the firm and its proprietor from collecting any money from investors or launching any CIS.

Sebi further asked the entities to provide a detailed inventory of all their assets and details of all their bank and demat accounts, among others.

In addition, they have been barred from selling any assets of the company except for the purpose of making refunds to their investors.

In case they fail to comply with the order, Sebi said the entities will continue to be barred from the securities market even after the completion of four years of restrictions imposed on them “till all the CIS are wound up and all the money mobilised through such schemes are refunded to its investors with returns which are due to them”.

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