Sebi clamps down on illegal investment plan by Sai Prakash

Coming down hard on an illegal realty investment scheme, estimated at about Rs 886 crore, Regulator Sebi today barred Sai Prakash Properties Development and its directors from raising funds from public.
The Madhya Pradesh-based company has also been restricted from launching any new investment scheme.
Initial probe by Securities and Exchange Board of India (Sebi) found that Sai Prakash had mobilised funds promising an "expected return of participation" under a camouflage of a "Joint Venture Association" only to mislead and attract investment from the general public.
Sebi also noted that the company floated the 'collective investment scheme (CIS)' without obtaining the certificate of registration from the regulator.

To safeguard investors interest, the watchdog said that "until full facts and materials are brought and final decision is taken in the matter, it becomes necessary for Sebi to take urgent preventive action by way of an interim measure" against Sai Prakash Properties.
Accordingly, Sebi has directed the company and its seven promoters/directors "not to collect any fresh moneys from investors from its existing scheme" and "not to launch any new scheme/plan or float any new companies/firm to raise fresh moneys".

Further, Sebi has asked the company "not to dispose of any of the properties or alienate the assets of the existing scheme" as well as "not to divert any funds raised from public at large".

The company has to immediately submit the full inventory of the assets owned by it out of the amounts collected and furnish all the information sought by Sebi including investor details within 15 days of the receipt of this order.
As per the order, the company had raised amounts from investors in 2009-10 (Rs 16 crore), 2010-11 (Rs 166 crore), 2011-12 (Rs 350 crore), 2012-13 (Rs 243 crore), 2013-14 Rs (111 crore). With this the total amount of Rs 886 crore were mobilised.
Sebi had received information from Reserve Bank of India, on December 12, 2013, regarding fund mobilisation from general public by Sai Prakash Properties Development, under the garb of investment in land.