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Sebi today barred Sun-Plant Agro and its three directors from the securities market for five years for running an illegal collective investment schemes (CIS) and also prohibited them from mobilising funds.
The latest order comes after Sun-Plant Agro failed to comply with market regulator Sebi's order dated May 3, 2011 that directed the company to wind up its existing collective scheme and refund the collected money along with returns to the investors within three months.
In its today's order, the Sebi said it restraining and debarring Sun-Plant Agro, its MD Awdesh Kumar Singh and two directors Girija Shankar Kumar and Sant Kumar "from accessing the securities market and further prohibit them from buying, selling or dealing in securities market, directly or indirectly, in any manner whatsoever for a period of five years."
It also prohibited these entities from "mobilising funds under any schemes or arrangement, existing or future."
The Sebi further stated that in the event the company fails to wind up its existing collective scheme and refund the money collected by it, the regulator will initiate attachment and recovery proceedings against these entities.
The Securities and Exchange Board of India (Sebi) found that Sun-Plant Agro was running a 'collective investment scheme' without securing necessary approvals and registration.
Sun-Plant Agro was allegedly raising funds in the name of 'sale of plants'. The company is involved in the sale of trees to investors and maintains the same on behalf of purchasers.
According to Sebi's order, "It has been more than two years since the order (May 2011) has been passed but till date, as per the noticee's own submission without substantiating this claim, the noticees (Sun-Plant Agro and its three directors) have only repaid 60 per cent of the investors."
It is also noted that despite sufficient time granted after the hearing in the matter on November 13, 2013 as undertaken by them, the noticees have failed to substantiate their claim of repayment the investors along with proof or evidence of the repayment, it added.
As per the regulator, these entities have been granted enough opportunities to wind up their business, repay all the investors and file the necessary proof/evidence with the Sebi. They have so far failed to comply with the directions.
"In the facts and circumstances of this case, I find that the noticees have adopted dilatory tactics and have attempted to evade compliance of the direction issued vide order dated May 3, 2011. I, therefore, do not find any reason to grant further time as requested," Sebi Whole Time Member Rajeev Kumar Agarwal.
