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The Securities and Exchange Board of India (Sebi) has barred Rose Valley Hotels and Entertainments Ltd (RVHEL) from raising any additional money from investors, in yet another of a series of orders passed against collective investment schemes.
The group entities of Rose Valley are estimated to have raised Rs 1,000 crore from two million investors.
The Sebi order asked it not to dispose off properties under the schemes, nor divert the funds it has already raised or launch any new schemes; in an interim order passed on Wednesday.
"There is no other alternative left but to take recourse through an interim action against RVHEL for preventing it from further carrying on with its fund mobilising activity related to 'collective investment scheme', without registration from Sebi," said the order.
The order follows more than a year after the Additional Director General of Police, Office of the Director, Bureau of Investigation, Guwahati, Assam, wrote to Sebi in June 2012 stating the Rose Valley group of companies had raised Rs.1,006.7 crore from the public till February 2012.
The company had launched a holiday membership plan in 2010, under which, an investor could get a holiday package through payment of monthly installments. At the end of the installments, he could use the package or get the money back with interest.
The scheme had 2.1 million investors. Investors have complained of not getting the maturity amount on time.
The order states it is to be treated as a show-cause notice. The company and its directors have been given 15 days to file their reply.
The regulator has previously passed orders against Sumangal Industries, Maitreya Services and the Saradha group.
