Cracking down on a "buffalo purchase" illegal investment scheme that promised guaranteed monthly returns by selling milk, Sebi today barred Karnataka-based Sai Multi Services and its proprietor from collecting money from investors.
The Securities and Exchange Board of India (Sebi) has prima facie found that money pooling activity by the company was in the nature of "collective investment scheme (CIS)" and was being run without requisite approval from the regulator.
Sai Multi Services was collecting money from the public under its scheme for buying buffaloes and the investors were assured guaranteed monthly return by selling the milk produced from these buffaloes.
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According to Sebi, the company has collected around Rs 4.2 crore from the investors.
"I find that Sanjay B Tenginkai; Proprietor of Sai Multi Services has not obtained any certificate of registration under the CIS Regulations for its fund mobilising activity from the public, under the instant 'scheme' offered by it. Thus, it has prima facie violated ...The CIS Regulations," Sebi Whole Time Member S Raman said in an order.
Accordingly, Sebi directed "Sai Multi Services and its Proprietor, Sanjay B Tenginkai, not to collect any money from investors including under the existing 'scheme'."
It also asked them not to launch any new schemes or float any new companies/proprietary concern to raise fresh money.
Sebi has also asked the entities not to dispose any of the properties or assets acquired by existing scheme as well as not to divert the funds raised from public.
The regulator has also asked these entities to within 15 days from the date of receipt of the order submit all relevant and necessary particulars sought by the watchdog including details of the amount mobilised and refunded till date and scheme wise list of investors and their respective addresses.
The directions shall take "effect immediately and shall be in force until further orders.
