Taking strict action against an illegal money pooling activity, Sebi today directed Arohan Trustee Company to refund money collected from investors under the garb of an 'art fund' within three months with interest.
Securities and Exchange Board of India (Sebi) has also, with immediate effect, barred the company from accessing the securities market "for a period of four years" besides restraining it from raising money from investors through any Collective Investment Schemes (CIS).
According to Sebi, Arohan Trustee Company had sponsored the art fund without obtaining certificate as mandated under CIS norms.
As many as 94 investors had contributed an amount of Rs 24.50 crore to the fund of Arohan Trustee Company, the regulator said.
"Arohan Trustee Company Private Ltd is directed to refund the entire monies collected by it under its scheme to all the investors along with an interest at the rate of 10 per cent per annum (from the date of investment till the date of part refunds) within a period of three months...," Sebi said in an order today.
The company would have to submit a winding up and repayment report to Sebi, within 15 days of completion of the refund to the investors.
"Arohan Trustee Company Private Limited shall abstain from collecting any money from the investors or launch or carry out any collective investment schemes including the scheme which have been identified as a collective investment scheme in this order," Sebi said.
Restraining Arohan Trustee Company from the capital markets for four years, Sebi also said that the firm shall remain restrained from dealing in securities in case of non-compliance with the regulator's directions.
Besides, Sebi would make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of Arohan Trustee Company and would begin attachment and recovery proceedings against the company, in case of failure to comply with orders.
Sebi had conducted a probe in the matter after it came across certain media reports and newspaper articles regarding the mobilisation of funds from the investors under the scheme of 'art fund', with an objective to invest in the works of art.
