MUMBAI, March 26: Yet another plantation company has stopped making payments to investors. Arrow Global Agrotech Ltd, engaged in commercial horticulture and agriculture, has stopped paying assured returns to its unitholders "in order to carry out the plan of financial restructuring". Several investors who had gone to the bank to encash cheques issued by Mumbai-based Arrow Global had a rude shock as the bank refused to honour their cheques. It is learnt that the Securities and Exchange Board of India, (SEBI) had vide its letter asked the company not to mobilise any money from the public unless the instruments of the schemes are rated as per provisions. This has dealt a severe blow to the company as it is unable to pay the old depositors with the new ones.While taking shelter under the letter from SEBI, the company has asked the investors not to deposit any of the cheques already issued by the company."Other companies in the same business also received notices, but did not not stop payment insteadrefused taking any further investment from investors," said an investor. In fact, several investors have approached the police as cheques deposited by the company has bounced.It may be recalled that the company mobilised funds from hundreds of investors through various schemes. "While collecting the money they said it would be used for developing land and growing various fruits. Now the company has stopped making assured returns. We're not sure whether land is there for real or not," said an investor whose post-dated cheque from the company has bounced.Udai Goyal, chairman and managing director of Arrow Global, said in a media meet today that the SEBI should be blamed for its sad state of affairs. "The role played by SEBI has been more of a destructive nature than a developmental or regulatory one. SEBI has not yet drafted any regulations for such collective investment schemes nor has it pursued the details furnished to it by the company. The earlier statement of SEBI to have a public debate andindustry representation while drafting the regulations seems to have been forgotten by them," he said."Even surprising, is the fact that SEBI is only now taking the step of collating information following the directive issued by the central government was effective since November 18, 1997. A case of drafying the regulations first and then verifying facts seems to be the latest way of working with SEBI," Goyal said.Goyal claimed that the company has till date mobilised around Rs 30 crore and the same can be accounted to the rupee in the projects and businesses.
