In a major crackdown on Rose Valley, regulator SEBI today ordered a refund totalling an estimated amount of over Rs 5,000 crore to about 22 lakh investors who had parked money in the holiday membership plans of the group as it declared those schemes illegal.
As per the SEBI order, more than 21.9 lakh investors are believed to have invested in these schemes as per the latest available records.
In the balance sheet filed by the company for the financial year 2012-2013 (as available on MCA portal), an amount of around Rs 5,000 crores is reflected under other current liabilities that were refundable liability under the membership plan, the SEBI said, but did not mention the current liability.
After finding the fund mobilisation to be an illegal collective investment scheme, the SEBI ordered that Rose Valley Hotels and Entertainment Limited and its directors, namely, Gautam Kundu, Ashok Kumar Saha, Shibamoy Dutta and Abir Kundu are jointly and severally liable to wind up the Holiday Membership schemes plans and refund the monies collected from the investors with returns as promised, which was up to 18 per cent.
Within two weeks of refund, the company and its directors will have to submit a repayment report with proof of trail of funds claimed to be refunded and the receipts from investors.
In the event of failure by Rose Valley Hotels and Entertainment Limited and its directors to comply with SEBI orders, the regulator would initiate recovery proceedings against them as they cannot alienate or dispose of or sell any of the assets of Rose Valley Hotels and Entertainment Limited except for the purpose of making refunds to its investors.
Besides, SEBI will vary the company and its directors from securities markets for four years, while certain board members would also be barred from holding positions of directors or key management personnel at listed companies.
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