In fresh action against West Bengal-based MPS Greenery Developers for running fraudulent investment schemes, Sebi today ordered attachment of its share holdings in eight group firms for failing to refund Rs 1,520 crore with returns to affected investors.
Separately, the Securities and Exchange Board of India (Sebi) has also ordered attachment of about Rs two crore held by the company with West Bengal Housing Infrastructure Development Corporation.
These actions follow attachment orders passed by the Sebi yesterday for shares held by MPS Greenery in another group firm, MPS Food Products, as part of its regulatory proceedings to recover the money fraudulently collected by the company from gullible investors, mainly in West Bengal.
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This is the biggest ever recovery proceeding initiated by the Sebi ever since it got such powers last year.
The eight companies on which the new attachment orders would apply include MPS Aqua Marine Products, MPS Industries & Agro Research, MPS Infotech, MPS Resorts & Hotels, MPS Ayurvedic & Herbal Products, MPS Real Estate & Infrastructure, MPS Retail & Fast Food and MPS Transportation & Logistics.
The Sebi had initiated recovery proceedings against MPS group in October 2013, when the market regulator had asked this West Bengal-based firm to return Rs 1,520 crore collected from investors through unauthorised collective investment schemes (CIS), along with applicable returns, interest payments and other related charges.
The Sebi has already sent attachment notices for at least 51 accounts held by the group with eight banks, including public and private sector lenders.
As per these orders, "MPS Greenery has not paid the dues amounting to Rs 1,520 crore along with returns to the investors" in respect of Sebi's recovery proceedings, as also the interest, costs, charges and other related payments.
Accordingly, MPS Greenery Developers and other group firms have been prohibited and restrained from transfer of shares held by MPS Greenery Developers in these companies.
These nine firms have also been prohibited from creating any encumbrance or receiving any dividend on MPS Greenery Developers' shares.
The Sebi has told West Bengal Housing Infrastructure Development Limited to freeze Rs 2,00,46,000, along with any interest and dividend becoming payable, which has been in its custody on for MPS Greenery Developers.
The Sebi has been taking action regulatory actions against companies which are pooling funds through illegal schemes, many of which are from West Bengal.
It has taken action against companies including Sun Plant Agro, Rose Valley Real Estate, MPS Greenery Developers. All these firms were collecting money from investors through unauthorised collective investment schemes (CIS).
