Regulations
SEBI asks Swar Agroteak not to collect money from investors

The company was engaged in fund mobilising activity from public by floating/ sponsoring/  launching Collective Investment Scheme (CIS) as defined in section 11AA of the SEBI Act, 1992, according to the SEBI Order

 

The SEBI Order passed on Swar Agroteak and Housing (India) Private Limited (SAHIPL), Etawah,  directed the company and its directors, Rajesh Awasthi, Pravesh Kumar Karowliya, Raghuvir Singh,  Dharmendra Kumar Pal, Jitendra Kumar Porwal and Shiv Kumar not to collect any fresh money from the investors under its existing scheme or not to launch any new schemes or plans or float any new companies to raise fresh moneys; not to dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by the company; and not to divert any funds raised from public at large which are kept in bank account(s) and/or in the custody of SAHIPL.
 
The company was engaged in fund mobilizing activity from public by floating/sponsoring/ launching Collective Investment Scheme (CIS) as defined in section 11AA of the SEBI Act, 1992.
 
SEBI had received a complaint on 26 March 2013 alleging that Swar Agroteak and Housing (India) Private Limited (SAHIPL ) was collecting money from the investors by promising allotment of land and that it had collected huge sums of money by promising to pay high returns from the profits received on the land. However, as per the complainant, the company was 'neither registered with RBI nor it had any license to raise money from the investors.' SEBI then started an investigation.
 
The SEBI Order mentions the initial findings as “Swar Agroteak and Housing (India) Private Limited (CIN: U74999UP2004PTC029042) was incorporated on 9 September 2004 as Golden Triangle Sales Private Limited and later changed its name to Swar Agroteak and Housing (India) Private Limited with effect from 30 September 2005. The registered office of the company is at Shastri Chauraha, Near Hero Honda Show Room, Etawah -206001 (UP). Rajesh Awasthi, Raghuvir Singh, Pravesh Kumar Karowliya and Shiv Kumar are the Directors of SAHIPL. Dharmendra Kumar Pal and Jitendra Kumar Porwal had resigned from the directorship of the company with effect from 14 September 2005 and 20 November 2011 respectively.”
 
SEBI also found out the system for investors included, “The applicants/ investors who are interested in the scheme of development and maintenance of land offered by SAHIPL are made to file an Application cum Agreement with SAHIPL. The application form contains basic details of the applicant (like name, address etc.), plan details (giving plan number, number of land units, terms of plan, total consideration, lump-sum payment, regular instalment plan, mode of payment), etc.”
 
The SEBI Order finds the system in SAHIPL to be that of a collective investment scheme and points out, “In light of the above analysis and examination, prima facie, the activity of fund mobilisation by SAHIPL under its 'Scheme' with a promise of return/ estimated realizable value, when considered in light of peculiar characteristics and features of such scheme, as discussed in the preceding paragraphs satisfies all the four conditions specified in Section 11AA (2) of the SEBI Act.”
 
The SEBI Order continues, “the launching/ floating/ sponsoring/causing to sponsor any 'collective investment scheme' by any 'person' without obtaining the certificate of registration in terms of the provisions of the CIS Regulations is in contravention of Section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations. It is noted that SAHIPL has not obtained any certificate of registration under the CIS Regulations for its fund mobilising activity from the public, under the instant 'Scheme' offered by it.”
 
Further, the activity of illegal mobilisation of funds by SAHIPL through its schemes, prima facie, amounts to a fraudulent practice in terms of Regulation 4(2)(t) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market), 2003 (PFUTP Regulations), according to the SEBI Order.
 
Hence, the restrictions in the SEBI Order on the company and its promoters/ directors.
 

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SEBI bars Equinox Infratech from raising funds through NCRSDs

The company was found engaged in fund mobilising activity through issue of NCRSDs to more than 49 persons without complying with the relevant provisions of the Companies Act, 1956 and SEBI (Issue and Listing of Debt Securities) Regulations, 2008, according to the SEBI Order

 

SEBI, in its Order on Equinox Infratech Limited, directed that the company shall forthwith cease to mobilise any fresh funds from investors through the offer of Non-Convertible Redeemable Secured Debentures (NCRSDs) or through the issuance of equity shares or any other securities to the public and/or invite subscription.
 
The company and its directors viz. Prabir Chakraborty, Prasanta Chakraborty, Sandeep Chatterjee, Rahul Kumar Shahi and Nandalal Balti are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, and are restrained from accessing the securities market and prohibited from buying, selling or otherwise dealing in the securities market, according to the SEBI Order.
 
The Debenture Trust namely Equinox Debenture Trust (represented by its trustee viz. Arpita Chakraborty), is prohibited from continuing with her present assignment as a debenture trustee in respect of the Offer of NCRSDs of the company and also from taking up any new assignment or involvement in any new issue of debentures.
 
The company was found engaged in fund mobilising activity through issue of NCRSDs to more than 49 persons without complying with the relevant provisions of the Companies Act, 1956 and SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
 
SEBI had received a complaint dated 25 July 2013 alleging that Equinox Infratech Limited is illegally raising money from the general public through the issuance of debentures. The complainant also provided a copy of brochure-cum-application for the issuance of Non–Convertible Redeemable Secured Debentures (‘NCRSDs’) by Equinox. SEBI vide e-mail dated 25 August 2013 received one more complaint against Equinox Group alleging the illegal raising of funds by them.  SEBI started an investigation and found out that the company was involved in a public issue activity.
 
SEBI found Equinox’s claim, "We would like to bring to your attention that we have issued debentures of the company purely on a private placement basis," as false. SEBI also conducted physical verification of Equinox's registered office address at Gwalior on 15 October 2014. During the visit it was noted that the company did not exist at the given address.
 
Efforts were also made by SEBI to obtain information on Equinox from Ministry of Corporate Affair's Website i.e. MCA21 portal.
 
The SEBI Order inferred from the investigation, “from the abovementioned, it will follow that since the Offer of NCRSDs is a public issue of securities, such securities shall also have to be listed on a recognised stock exchange, as mandated under Section 73 of the Companies Act, 1956. In this regard, reference is made to Sections 73 of the Companies Act, 1956, of which sub-Sections (1), (2) and (3) are relevant for the instant case…”
 
As the company had not registered its prospectus with the RoC (Registrar of Companies), the SEBI Order made it clear, “In view of the same, I find that prima facie, Equinox has not complied with the provisions of Section 60 of Companies Act, 1956.”
 
SEBI, in its investigation, also found that Equinox Debenture Trust (represented by its trustee viz.  Arpita Chakraborty) has prima facie, failed to meet the eligibility criteria specified under the provisions of the Debenture Trustees Regulations and therefore, has acted as unregistered Debenture Trustees, which amounts to violation of the abovementioned provisions of the SEBI Act read with the Debenture Trustee Regulations.
 
On the debenture redemption reserve requirement, the SEBI Order observed, “Further, under Section 117C of the aforesaid Act, where a company issues debentures, it shall create a debenture redemption reserve for the redemption of such debentures, to which adequate amounts shall be credited, from out of its profits every year until such debentures are redeemed. Based on the material available on record, I find that Equinox has not complied with the provisions of Sections 117C of the Companies Act, 1956 and therefore, has prima facie violated the aforesaid provisions.”
 
As the violations by the company are severe, SEBI has issued the Order with strict restrictions. SEBI plans a refund of money already collected and says in its Order, “In this context, Equinox and its abovementioned Directors are advised to show cause as to why suitable directions/prohibitions under Sections 11(1), 11(4), 11A and 11B of the SEBI Act including the following, should not be taken/imposed against them:  Directing them jointly and severally to refund money collected through the Offer of NCRSDs along with interest, if any, promised to investors.”
 
Finally, the SEBI Order concludes by saying, “This Order is without prejudice to the right of SEBI to take any other action that may be initiated against Equinox and its abovementioned Directors; its Debenture Trustee, viz. Equinox Debenture Trust (represented by its trustee viz. Arpita Chakraborty), in accordance with law.”
 

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PM urges RBI to prepare roadmap for 'financial inclusion' by 2035
Prime Minister Narendra Modi on Thursday urged the Reserve Bank of India (RBI) to prepare a road-map for "financial inclusion" ahead of its centenary year in 2035.
 
"The RBI will be completing 100 years in 2035 and it will be appropriate for it to work on financial inclusion and prepare a roadmap to achieve it," Modi said, attending the 80th anniversary celebrations of the apex bank in Mumbai.
 
In addition to the RBI's centenary, he said other milestones to achieve financial inclusion could be the 150th birth anniversary of Mahatma Gandhi in 2019, the 75th year of Indian independence in 2022, and the RBI's 90th anniversary in 2025.
 
He said these were four important dates to create a roadmap for financial inclusion, which should not remain just a government programme, but become an 'article of faith.'
 
The prime minister also suggested that banks should be considerate in extending loans to the poor and while making recoveries, especially from the farming community.
 
Expressing concern at the plight of the poor and farmers' suicides, he said these should "shake up the conscience of the banking sector".
 
"Our poor farmers commit suicide... This pain should not only be restricted to the media. When a farmer dies, does it shake the heart of the banking sector? Only because he has taken loan from a moneylender, he has to face death," Modi said.

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