Additional Sessions Judge Pawan Kumar Jain convicted managing directors Sunil Kumar Asthana and Pawan Kumar Verma of Flawless Plantations Ltd on a complaint by Securities and Exchange Board of India (SEBI).
While convicting the two for illegally raising fund to the tune of Rs 17.25 lakh, the court also imposed a fine of Rs two lakh each on them.
"The unorganised and unwary investors had invested their hard earned money in the schemes of the company of the accused with a hope that they would get handsome return on their investment. But instead of earning on their investments, investors even failed to get their principal amount.
"The company accused had mobilised funds to the tune of Rs 17.25 lakh in violation of provisions of the SEBI Act and during trial, convicts failed to produce any evidence to show that company had refunded the amount to the investors," said the judge and imposed a fine of Rs four lakh on the firm too.
Seeking leniency for the firm's two MDs, their counsel had requested the court to impose a token fine on them as they had no criminal history.
The court, however, rejected their plea saying "It is not a fit case where convicts can be released by imposing token fine. In my opinion, convicts deserve some substantial punishment besides fine amount."
SEBI had filed a complaint against the two on December 15, 2003, alleging that they had collected money from people by floating a Collective Investment Scheme (CIS) during 1997-98 without obtaining a registration certificate for the same.
During the trial, the convicts had admitted that it had not acquired the registration certificate but argued that it had repaid all the amount to the investors and that no investor had filed any complaint till date.
The court, however, dismissed their argument saying that merely because no investor has filed a complaint before SEBI, it cannot be presumed that the company had repaid its investors.
