Rejecting Alchemist Infra Realty's plea to grant more time to refund investors' money, markets regulator Sebi today said it will initiate attachment and recovery proceedings against the company.
The Securities and Exchange Board of India (Sebi), in an order in June 2013, had directed the firm to refund the money illegally raised from investors within three months. Later, the timeframe was extended to 18 months by the Securities Appellate Tribunal (SAT).
With the deadline expiring in January 2015, Alchemist approached Sebi again seeking a further extension of 24 months for complying with the regulator's directive.
In an order passed today, Sebi has rejected the company's plea, saying it is almost three years since the final order was passed by it and despite such a long period, Alchemist had not made complete refunds to its investors.
"The company's laid-back attitude and non-cooperation with the auditor in the verification exercise made it impossible for the auditor verify the refunds claimed to have been made. Therefore, it would be a travesty of justice to allow more time to the company for making repayments to investors," it said.
Accordingly, "Sebi shall take necessary steps to initiate attachment and recovery proceedings against the company/directors for the purposes of making refunds to investors and shall also initiate further proceedings".
The company sought extension on the ground that due to an overall slump in real estate prices, it was not able to crystallise any agreement either for disposal or development of such lands and that the development and/or disposal of such lands in due course is likely to yield a sum far in excess of the amount presently outstanding.
The firm also contended that it has to wait for some time so that there is correction in the real estate market and the properties are able to fetch their just and reasonable value.
The company claimed that it had repaid Rs 1,077 crore as on March 2013 out of Rs 1,916 crore garnered from investors.
As per the order of SAT, the firm could approach Sebi only in the case of any "eventuality arising in future" for seeking further extension of time to implement the regulator's order.
"Timing the market or waiting for price correction of real estate cannot be termed as an eventuality. The company was well aware of the timeframe to make refunds in terms of the order passed by SAT. Further, the interest of investors cannot be prejudiced by allowing the company to wait for a price which matches with its liking," Sebi Whole-Time Member Prashant Saran said in his 22-page order.
