Cracking the whip on West Bengal- based Rose Valley Real Estates and its promoters for collecting over Rs 2,000 crore through illicit money-pooling scheme, Sebi today ordered refund of investors' money within three months and barred them from securities markets.
The capital markets regulator also warned the company of attachment and recovery proceedings if it fails to refund the money and asked the government and police authorities in that case to initiate winding-up process and criminal case for offences of fraud and misappropriation of public money.
Sebi has asked them to wind up all their investment schemes, while the Rose Valley Real Estates and Constructions and its five promoters/directors have been restricted from accessing the securities market till all their collective investment schemes are wound up and the funds are repaid to the investors.
Sebi probe has found that the Rose Valley group firm was running a a 'collective investment scheme' without necessary approvals and registration with Sebi.
The company was raising funds from public on the pretext of selling plot of land under its scheme called "Ashirbad".
Accordingly, Sebi in a order dated June 18 has asked Rose Valley Real Estates and Constructions, its promoters and directors "to wind up its scheme and refund the money collected by it under the scheme with returns which are due to the investors as per the terms of offer within a period of three months from the date of this order and submit a winding up and repayment report to Sebi".
Under the scheme, a portion of claimed sale price of the plot is collected from the investors as earnest money.
Earlier, Sebi thorugh an interim order in 2011 had barred Rose Valley Real Estates from raising funds.
In its final order, the watchdog said that the money collected by the company increased to Rs 2,016 crore as on March 31, 2011, from Rs 1,358 crore a year before that.
Sebi also observed that the company till date had not provided any documentary evidence to substantiate its claim that it has refunded the money to the investors.
The company's balance sheet showed that the outstanding investors' money as on March 31, 2013 stood at only Rs 742.45 crore.
As per Sebi order, the company had submitted that it has wound up its scheme as on December 2010, but the same was not substantiated with any document.
Besides, Sebi was also informed by the Bureau of Investigation, Assam in June 2012 that the company was continuing to collect money from already enrolled investors, even after passing of interim order.
The promoters/directors of the company are -- Gautam Kundu, Shibamoy Dutta, Ram Lal Goswami, Abir Kundu and Ashok Kumar Saha.
