Regulator Sebi today granted four more months till November-end to Networth Marketing Ltd and its directors to refund investors' money which the company had raised through illegal collective investment schemes (CIS).
The extension comes after the entities had sought more time to repay investors.
The Securities and Exchange Board of India (Sebi) gave more time saying the company and its directors have started the process of refund in compliance with its directive.
However, they have not been able to complete the payment of maturity amount to all investors due to the time consuming process of searching prospective buyers "who will be able to give them good price for the plots of land owned by the company and the fact that properties of the firms are spread across three states", the regulator said.
Further, it has been also claimed by the entities that they have already refunded more than 50 per cent (Rs 26.46 crore) of the total amount due to investors.
"Upon consideration of the facts and circumstances... I am inclined to grant an extension of four months to the applicants, in the interest of investors," Sebi whole time member G Mahalingam said in an order.
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The regulator said that the time to comply with the direction of refund issued against Networth and its directors, -- Anis Mohamad Kazi, Bhaskar Bhao Vasage, Mahendra Mahadeo Bhuvad, Nuruddin Shaikh, Bhalerao Yaswant Misal and Partha Ghosh -- on August 28, last year, "stands extended by four months from today and shall expire by November 30, 2018".
Following the completion of the refund, the entities within a further period of seven days have to submit a winding up as well as repayment report to the regulator.
The company had raised funds from the public through various "schemes of booking and sale of plots of land" which were in the nature of collective investment schemes without getting registration from Sebi. It had mobilised Rs 37.27 crore from around 18,000 investors.
On the repayment plan, Sebi noted that the entities have already appointed real estate agents for selling plots of land belonging to the company and have also sold some plots of land.
As per submissions of the entities, most of the amount of sale proceeds has also been received by the company and the money was used by it to make refund of the maturity amount due to the investors.
It is also observed from the copies of acceptance letters furnished by the entities that some investors have also agreed to accept plots of land registered in their favour in lieu of the maturity amount. Further, the company has submitted that negotiations for sale of property worth over Rs 8 crore is underway and they will be able to sell it soon.