The Delhi High Court yesterday passed sweeping orders for regulating the activities of plantation companies and collective investment schemes.
A division bench consisting of Justice Anil Dev Singh and Justice Mukul Mudgal directed all the 591 plantation firms to get themselves rated by agencies recognised by the Securities and Exchange Board of India (Sebi).
The court also asked the firms to list assets and liabilities.
The firms were also ordered to provide a list of the directors and their personal assets with dates of acquisition.
According to the court order, further mobilisation of funds must strictly comply with the Sebi directives issued from time to time. It restrained the plantation companies from alienating their assets.
The court clarified that the order will not come in the way of the plantation firms giving any refunds to their investors if they so desire.
The next date of hearing of the public interest litigation has been fixed on October 29 for further directions. In the meanwhile, Sebi has been directed to issue a public advertisement giving a gist of the order.
According to a posting on Sebi's Website, a senior advocate representing Sebi pointed out that funds had been locked up in various schemes floated by the plantation firms. Most of these companies are in no position to honour their commitments and action should be taken to protect investor interests.
Sebi had also filed a petition in the Bombay High Court for directions for curbing the activities of plantation companies. So far, only 27 companies have got themselves rated and all of them have been rated below investment grade.
