Citizens' Issues
Credai protests reach the ears of the government

Maharashtra chief minister Devendra Fadnavis has directed the state administration to implement an automated Development Control Regulation (DCR) permission system over the next two months

 

As planned, Confederation of Real Estate Developers' Association of India (CREDAI) carried out its protests in the aftermath of the suicide of Cosmos Group chief Suraj Parmar in Thane, Maharashtra. A large gathering of builders, contractors and members from allied industry marched to the Thane Municipal Corporation in memory of Parmar and to protest against administrative delays and the misuse of obsolete laws and the RTI Act. In Navi Mumbai, too, a delegation from the Builders Association of Navi Mumbai took a demonstration march to the offices of Cidco and the Navi Mumbai Municipal Corporation. A builder delegation from MCHI-CREDAI called on Maharashtra chief Minister Devendra Fadnavis and expressed concern over the administrative sanction process hitting the real estate sector.Housing minister Prakash Mehta was present at the meeting.

 

Fadnavis on Tuesday directed the state administration to evolve and implement an automated Development Control Regulation (DCR) permission system over the next two months. The system would not need human interventions and it would leave no scope for blackmailing of developers by politicians or officials.

 

A case of abetment and under the Prevention of Corruption Act has been registered against yet-to-be-identified political functionaries and civic officials in the suicide case of builder Suraj Parmar, according to Economic Times. The police have revised the accidental death report they had filed in the suicide case last Wednesday. Police claimed they have secured sizeable leads. Police have seized mobile phones, laptops and other gadgets used by Parmar.

 

Parmar, in his suicide note, has written that builders have no answers to customers' queries on completion of projects due to stays and notices issued to them by the civic body. He stated that local corporators, in nexus with civic officials, get notices sent to builders and in return, they have to pay at every turn. In the note, he has mentioned he was not under any kind of debt.

 

In Bengaluru, hundreds of personnel from the real estate industry took to the streets in protest. As part of an All-India protest against the “business environment” for real estate developers, CREDAI-Karnataka too closed their offices on Tuesday. The protestors marched to Vikasa Soudha, where a memorandum was submitted to Bengaluru district in-charge Minister Ramalinga Reddy. Among the demands presented in the memorandum was to improve “ease of business” for the developers and for faster approvals. With 30% of the sale price of flats going in taxes and cesses, realtors said they were put in a bind due to the inflating costs of constructions. Similarly, interference from various departments, officers and archaic by-laws was making development of land difficult, said the protestors.

 

In Pune also, there were extensive protests from the real estate industry.

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COMMENTS

Vikram Dhotre

1 year ago

Do hope the government also lends ears to the needs of buyers and implements the Real Estate (Regulation and Development) Act.

SAT Order Exposes SEBI’s continuous bungling with Osian’s Art Fund
From not being sure about the applicability of its own regulation to issuing bizarre order of refunding money with 10% interest, SEBI’s repeated bungling under three different chairmen is shocking
 
The Securities Appellate Tribunal (SAT) on Tuesday set aside part of an order of Securities and Exchange Board of India (SEBI) that directed Osian’s Connoisseurs of Art to refund the unpaid amount of Rs102 crore raised from investors along with interest at 10% per annum. The Osian’s Art Fund was a CIS (Collective Investment Scheme) promoted by Neville Tuli, an art dealer. CIS is any scheme made by any company under which the contributions by investors are pooled, to receive profits. 
 
The tribunal held that art funds came under the regulator’s (SEBI) jurisdiction and that Osian’s Art Fund was indeed a CIS. But the tribunal asked the regulator to re-examine its order to refund money. It said the regulator had not explained why Osian’s Connoisseurs of Art needed to return money to investors since the scheme neither offered guaranteed returns nor offered interest on invested amount. While passing this order, SAT has exposed how SEBI has repeatedly bungled in handling this case. Here is the sequence of events that shows how pathetic has been SEBI’s record in the Osian’s case.
 
Before the Scheme was launched: Osian’s Art Fund was launched in 2006. Osian claims in an affidavit that: “Prior to the launching of the scheme the appellant had formal meeting with SEBI’s Executive Director Pradeep Kar  on February 15, 2006 and also had informal discussions and correspondence with SEBI on the question as to whether the scheme would attract registration under any of the regulations framed by SEBI. However, no response was received by the appellant from SEBI in that behalf. The SEBI chairman at that time was M Damodaran.
 
After the Scheme was launched: SEBI had begun its investigation of Osian in 2007, issuing a show cause notice to Osian on 12 October 2007. However, shockingly, SEBI officials went to sleep after issuing this show cause notice. Even as the show cause notice was pending, on 13 February 2008 SEBI had issued a press release,  stating that Art Funds/Schemes were CIS and  that  floating  such  schemes  without  obtaining registration  from  SEBI  would  be  in  violation  of Section  12  of  SEBI  Act  read  with  Section  11  and Section  AA  of  SEBI  Act.  In spite of  the  press release  the  appellant, Osian,  has  failed  to  apply  for  and obtain registration under CIS Regulations. Once again SEBI kept quiet. Osian was allowed to operate as it is. M Damodaran was the SEBI chairman till 18th February 2008.
 
After the Scheme ended: The scheme closed in 2010 and Osian was paying back only a part of the money and only selectively. One of them was A. K. Muthuswamy, of Chennai. He complained about Osian to SEBI. In shocking reply, SEBI told him on 31 January 2011 that the scheme was not covered under CIS and therefore, the investors, who have invested in the scheme of the appellant, cannot seek redressal of their grievances from SEBI. Remember, a few years ago SEBI had issued a show cause notice and also issued a press release about Osian being an art fund! At this time, the SEBI chairman was CB Bhave who left office in February 2011.
 
The matter went to the SAT. On 29 November 2012 SAT said that SEBI’s 31 January 2011 communication to Muthuswamy was wrong and directed SEBI to re-examine the issue in accordance with law. By an order passed on 15 April 2013, SEBI held Osian guilty of sponsoring and managing a CIS without obtaining certificate of registration from SEBI, in contravention of Section 12(1B) of SEBI act and Regulation 3 of the SEBI’s (Collective Investment Schemes) Regulations, 1999.  By that order, Osian was directed to wind up the CIS and refund the monies collected but not paid to the investors. In addition, Osian was also directed to pay the amount of profits/income earned that is due to the investors as per the terms of its offer or pay interest at the rate of 10% per annum on the amount invested from the date of investment till the date of refund, whichever is higher. The SEBI chairman this time was UK Sinha, who is expected to end his term a little later from now.
 
Osian went to the SAT against this order arguing that it was not a CIS. SAT has now rejected this contention. “The scheme floated by Osian fulfils all the conditions set out Section 11AA(2) of SEBI Act and therefore, the decision of SEBI in holding that the scheme floated by SEBI falls within the scope of CIS cannot be faulted”, said the SAT Order.
 
However, the SAT Order also points out, “SEBI does not find fault with the scheme of Osian which neither offered guaranteed return nor offered interest on the amount invested. In such a case, on what basis Osian is directed to refund the amount invested with interest at the rate of 10% per annum is not set out in the impugned SEBI order.”
 
SAT goes on to say “…for the error committed by SEBI in misconstruing its own regulations and for the inordinate delay on part of SEBI in arriving at correct conclusion, whether Osian can be penalised by directing to refund the amount with interest at the rate of 10% from the date of investment needs consideration, especially when the scheme has come to an end in the year 2010 and the terms of the said scheme neither offered guaranteed return nor offered interest on the amount invested.”
 
SAT has said that although regulation 65 of CIS Regulations empower SEBI to direct refund with interest in appropriate cases, how in the facts of present case, directing refund of the amount invested with interest is justified, is not set out in the SEBI order of 2013.
 
Hence, the SAT ruled that it is setting aside the directions contained in the SEBI order, to the extent that it directs Osian to refund the monies at 10% interest per annum. Instead, the SAT Order has directed SEBI to decide those issues afresh after affording an opportunity of hearing to Osian and AK Muthuswamy.
 
You may also read the earlier articles on Osian:
 
 
 
 
 
 

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COMMENTS

Bosco Menezes

1 year ago

Thanks for the article link, VSwami

Rajendra M Ganatra

1 year ago

I am not surprised at this otherwise surprising gaffe from SEBI. Organisational culture often trickles down from the top. Trickle down effect from at least one SEBI name mentioned in the note could only lead to this muck!

vswami

1 year ago

OFFHAND
In a manner of critical viewing, the point of concern / bone of contention of a reader in his comment herein, as read and understood, rightly so, may be noted to be in -line /on the same wave length as of the posted comment @ http://feedproxy.google.com/~r/IndianCor... (SEBI’s order levying record penalty – some concerns) – also shared on Facebook.
A repeat instance of lack of proper vision. blatantly wanting wisdom in the proverbial "bark(ing) up the wrong tree", so to say the least.

Bosco Menezes

1 year ago

The Unitholders were in no way involved with the running of the fund. The people running the fund were supposed to be the experts, who understood how the Art Market functioned.
The Final NAV was thus declared by the Osians Art Fund without any involvement or input or pressure from or consultation with the unitholders. It was solely decided by the Trustees & Unitholders had no say in it. If they had declared a negative Final NAV, unitholders would have been very disappointed no doubt, but would have had no alternative but to accept the same, as returns were not assured.
But after the fund declared the Final NAV entirely at their discretion, to not then pay it out to the unitholders is quite unforgivable.
I have heard some talk about buyers of the Art reneging on their commitments. To this I can only say that it is for these experts who were running the fund to have known that it was conceivable that buyers of the Art might renege on their agreements, and if so, they could have withheld the declaration of the Final NAV till all payments were received. They , in all their wisdom & expertise declared the Final NAV, it is their responsibility therefore to see that the NAV is paid to the unitholders (with some interest for the delay).

Vaibhav Dhoka

1 year ago

SEBI Chairman are bureaucrats and they function in typical style as seen in all three bosses tenure.They have nothing to loose.It is investor who is always on receiving end.SEBI and both exchanges should give details of individual complaint and their settlement ration month wise.Then one can judge SEBI's actions.The general belief is ordinary investor never gets relief from SEBI and stock exchanges.

PACL: Suffering of investors and agent-investors continues
PACL’s small investors from remote districts are in a panic about their investments, as the company gives them a run-around; but SEBI recovery proceedings can begin only after 11 November 2015, as per SAT order
 
Lakhs of investors who put their hard earned money in PACL formerly Pearls Agrotech Corp Ltd, a collective investment scheme (CIS), are in a panic about the fate of their investment after the company has been ordered to refund their money. It may be recalled that this company has raised a whopping Rs49,000 crore from people across the country, claiming to have bought them a stake in land, like a land mutual fund. PACL has also used India’s slow legal system very effectively to delay regulatory action for several years, while it continued to collect money from people. In fact, it has doubled the money raised, even after Securities & Exchange Board of India (SEBI) began action against it.
 
The All India PACL (Pearls) Investors Association, on 13 October 2015, organised a protest-cum-meeting of investors in Parbhani district of Maharashtra. The Association, led by Rajan Kshirsagar, has started collecting applications forms from all investors in PACL, in order to send it to SEBI for further proceeding. Thousands of people from Parbhani district had invested thousands of rupees in PACL and all are now facing a severe financial crunch, which is magnified by the drought in the entire region.
 
During the meeting, it was decided to call for a protest before the Collector at Parbhani on 2nd November demanding action against PACL. The Association also demanded seizure all assets of PACL by SEBI for refunding money to investors. SEBI should algo create a lien on PACL assets in proportion of money invested by investors, SEBI should create a system to record complaints from investors in Parbhani district within next 15 days. "SEBI should also take action against other 95 companies barred from conducting similar CIS schemes," Kshirsagar said in a statement. 
 
Video recordings by the Association have stories about how people were convinced to become agents of PACL and have ended up persuading their family and friends to invest in the company. 
 
Sangita Jadhav, from Jintur taluka, personally invested Rs1 lakh in PACL. She also made several others to invest money in the CIS. Sangita says she joined PACL in 2009 and brought several people into the scheme. But her condition today is so bad that these investors are continuously asking her for refund of their money and she had to even keep her mobile handset switched off for most of the days as she has no answer. According to her, for more than two years, PACL told her that the company had filed a petition in High Court. "How many times, I can give next dates to people. Even thought people in the PACL office continue to give future dates whenever we ask for refund of our money," she says.
 
Sangita says, "About 30 people from my village had invested money in PACL. The company stopped paying us since October-November 2013. The bonds, which I submitted for redemption in November 2013, are still unpaid. All investors are now thinking about taking out a morcha to SEBI and seek refund of our money.”  
 
 
Another investor-cum-agent, Sudhakar Kshetre, says since he was unemployed, he joined PACL in 2007. "PACL had lot of expectations (from us) and since there was no other job available, I started working for them. From then, I made my relatives, friends and other people to invest about Rs10 lakh in PACL. This is apart from my own investment of around Rs30-40,000," he says.
 
"These people are harassing me for getting their money back. They say we invested money since you asked us to do so and since we do not know the company, you pay back (the money). 'You came to our house seeking money, now, you pay it back' is what people are telling me. Some people are even threatening to commit suicide in front of my doors. But I think, unless we all investors come together and take our case before SEBI, no money would come from PACL," Kshetre added.
 
 
Market regulator SEBI, the Securities Appellate Tribunal (SAT) and the Supreme Court have all ruled in favour of investors and directed PACL to refund money. SEBI, in a welcome move has started collecting applications or letters from all investors of PACL, both online and offline and sending it to the company for redressal. As per the order from SAT, the recovery proceedings can be initiated only after 11 November 2015, and till that time, investors will have to only wait.
 
If this is the situation in one small and remote district of Maharashtra, the plight of investors across India can only be imagined. Moneylife Foundation had written to SEBI asking it to create a separate email or format for PACL investors to lodge their grievances, especially since many are not very literate and are clueless about SEBI and the online complaint filing process of SCORES. 
 
Hopefully, other organisations and activists will be able to help people in the process. Moneylife Foundation has said that it will be happy to work with SHGs and NGOs around the country to collate information in various languages and forward it to SEBI. Those who need its help may contact [email protected] .
 
You may also want to read...
 

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COMMENTS

Benny Stephan

1 year ago

The regulators Sebi, Sat, RBI and MCA has not implemented any mechanism to refund the returns to the millions affected by ponzi schemes. The government has done nothing to help the customer's either.

Benny Stephan

1 year ago

The regulators Sebi, Sat, RBI and MCA has not implemented any mechanism to refund the returns to the millions affected by ponzi schemes. The government has done nothing to help the customer's either.

Benny Stephan

1 year ago

The regulators Sebi, Sat, RBI and MCA has not implemented any mechanism to refund the returns to the millions affected by ponzi schemes. The government has done nothing to help the customer's either.

Benny Stephan

1 year ago

The regulators Sebi, Sat, RBI and MCA has not implemented any mechanism to refund the returns to the millions affected by ponzi schemes. The government has done nothing to help the customer's either.

Benny Stephan

1 year ago

ple have invested their life time savings and more than 5 million people have already waited for 9 years to get the refund. People had committed suicide after not receiving the returns from Pacl India Limited. This legal proceedings against Pacl India Limited has been running for almost 20 years, first in high court and now in supreme court. The regulators of India Sebi and Sat are also of no help, they wasted so much time because of not implementing effective rules to stop so callrd ponzi schemes by various companies. I contacted sebi and they are still giving the same update where Sat ordered pacl to refund the returns before November 12, 2015. Sat also wasted 1 year to decide that the stand of Sebi is right. Why do regulators of India waste so much time.
RBI, MCA are equally responsible for not implementing efficient ways to curbe these so called ponzi schemes.
The politician are everywhere. Pacl Ibdia Limited had managed to get stay order from court to delay the proceedings of this case with the help of some politicians.
Pacl India Limited is equally responsible for taking advantage of inefficient judicial system and corruption in India.
It seems like the entire system is corrupt and slow.
90% of politicians are criminals in India. They have either committed some sort of crime like theft, murder, scams and so on. Its time that we realize this and may be a suggestion that we should keep some sort of entrance exam for selecting deserving candidates for each party. No criminals should be allowed to even participate in this exam. Instead put all the criminals in jail and clean corruption and criminals in India.
Its been almost 20 years, I don't know if this is the emotion in me, but I am very disappointed by this slow proceedings in every case in. India.
Will I ever get my money?
When will get the money?
Can anyone answer this questions?
Is there an answer in our system.

PPM

1 year ago

Only in India, this type of scam can happen..a real banana republic of mango men.


All our regulators are busy in keeping the small investors away from the legal investment avenues like Mutual Funds as they micro manage the Mutual Fund investments with so many regulations.

SEBI will always support the scamsters like Sahara, PACL, Saradha group.

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