Sebi asks police to file FIRs against 44 plantation cos

After a long delay, Sebi has asked the police to file first information reports (FIRs) against 44 erring collective investment scheme (CIS) ...

After a long delay, Sebi has asked the police to file first information reports (FIRs) against 44 erring collective investment scheme (CIS) units – widely known as plantation companies—for failing to refund investors’ dues despite repeated reminders.

While Sebi has not given any estimate of the investors’ money stuck in these companies, market sources say that they have defaulted nearly Rs 2,500 crore.

The capital market regulator has requested the police to file the FIRs against these plantation companies and their concerned officials for criminal breach of trust, cheating and criminal conspiracy against their investors—all of which were punishable under the Indian Penal Code. These CIS entities include nine from Maharashtra while the remaining were based in Delhi, Uttar Pradesh, Punjab, Haryana, Bihar, Tamil Nadu, Madhya Pradesh, Rajasthan and Uttaranchal.

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Besides these 44 entities, Sebi has also requested the police to file FIRs to take action against the concerned officials of five CIS entities in which liquidators/administrators and receivers had been appointed by the courts.

Sebi had also requested the Department of Company Affairs to initiate winding up of the erring entities and the concerned States to initiate civil and criminal proceedings against them. ‘Requesting the police for filing FIRs, was the further step towards fulfilling its mandate of protecting the interest of the investors,’ the Sebi said.

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