SEBI cracks down on 182 chit firms in 2 months

The Securities Exchange Board of India (SEBI) has cracked whip on 182 companies for fraudulently raising money from people in the name of collective investment schemes

Written by Madhuparna Das | Kolkata | Published: July 24, 2013 3:46:53 am

The Securities Exchange Board of India (SEBI) has cracked whip on 182 companies for fraudulently raising money from people in the name of collective investment schemes (CIS) and for releasing preference shares and debentures in violation of legal norms.

According to sources in the SEBI,it has over the last months issued notices to 60 companies for “deceitfully running” the CIS schemes while notices were served to another 62 companies for releasing preference shares and debentures in violation of the SEBI Act.

The action seems to be a ripple effect of the Saradha scam that has rocked the state as well as the country.

A senior SEBI official said: “These companies are not authorised by the SEBI to raise public money. Ever since the Saradha Group went bust,the market watchdog has issued wind-up notices to some of the major players that raise money from people under several schemes.”

On June 22,the SEBI also clamped down on Alchemist Infra Realty Limited,ordering to refund money,which were pegged to be more than Rs 1,000 crore,to investors within three months. Even as the company does not have a base in Bengal,it has a huge operational market here.

On July 10,Sumangal Industries Limited was banned from collecting funds through its CIS. The market watchdog ordered the Bengal-based company and its promoters and directors,including its MD Subrata Adhikary,to wind up its potato purchase scheme and refund money with interest to investors within three months.

A day later,the regulator came down heavily on Kolkata-based Rose Valley Hotels and Entertainment Limited(RVHEL),restraining the company from collecting funds under its holiday membership plan and barred it from launching new schemes.

While Rose Valley’s petition challenging the SEBI order was dismissed by the Calcutta High Court Tuesday,petition of Sumangal Industries is pending in the high court and that of the Alchemist is to come up before the Securities Appellate

Tribunal.

The market regulator is also fighting cases filed by the MPS Group in district and civil courts.

The SEBI had issued the wind-up notice to the MPS Group last year,prompting agents of the company to challenge the order. At present,12 cases against the SEBI have been filed by the MPS Group in courts of several districts,including West Midnapore,North 24-Parganas and Nadia.

While the MPS initially got a stay in eight cases,the market watchdog has got six cases vacated already,said a senior official of SEBI.

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