Market regulator Sebi today ordered immediate closure of unauthorised collective investment schemes run by Shree Sai Spaces Creations and directed the Pune-based firm to refund investors' money within 3 months.
Besides, the company and its directors have been barred from raising money from the public as well as capital markets.
The Securities and Exchange Board of India (Sebi) found that the company was inviting funds from the public for its 'joint venture participation project for solar energy generation' without due registration with it.
"I find that the company is engaged in the fund mobilising activity from the public by floating/ sponsoring/ launching 'collective investment schemes' (CIS)," Sebi Whole Time Member Prashant Saran said in a 20-page order.
With immediate effect, Shree Sai Spaces Creations and alongwith its four directors-- Suresh L Shrivastav, Laxmi S Shrivastav, Ritesh K Shrivastav and Vivek K Shrivastav-- have been asked to abstain from collecting any money from the investors or launch any CIS.
Besides, they have been asked to wind up all existing CIS of the company and refund the collected monies, with returns which are due to its investors as per the terms of offer, within three months.
Thereafter, within a period of 15 days, they have to submit a winding up and repayment report to Sebi, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds.
Sebi has also asked them to immediately submit a complete and detailed inventory of the assets owned by Shree Sai Spaces Creations, while they have been barred from alienating or disposing off or selling any of the assets of the company, except for the purpose of making refunds to investors.
If the company and its directors and promoters fail to comply with these directions, they would be barred from securities market and Sebi would make a reference to the State Government/Local Police to register a civil or criminal case against them "for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds".
Sebi further said it would also make a reference to the Ministry of Corporate Affairs to initiate the process of winding up of the company, while it "shall also initiate attachment and recovery proceedings" in the event of failure to comply with its directions.
The regulator received a complaint on October 6, 2013, alleging illegal mobilisation of funds by Shree Sai Group of Companies through a 'joint venture participation project'.
Sebi found that the investors who are interested in the scheme were made to enter into an MoU with Shree Sai Spaces. The funds were collected against the development cost and purchase consideration of the product (solar energy generation panels and a contiguous piece of land to install these panels).
In January, Sebi had barred Shree Sai Spaces Creations and its directors from raising money from investors for the solar energy generation project.
