SEBI found JSV Developers collecting money from public through its various schemes of joint venture association for development and maintenance of land
Market regulator Securities and Exchange Board of India (SEBI) has barred Madhya Pradesh-based JSV Developer India and its three directors, VijayLaxmi Kathait, Bhupendra Singh Kathait and Dinesh Hemraj Tembhare from raising funds from public and not to float any new plans.
SEBI said it found that JSV Developer was collecting money from public through its various schemes of "joint venture association" for development and maintenance of land.
This plan was found to be allegedly in the nature of unauthorised 'Collective Investment Scheme (CIS)', SEBI said in an order issued on 31st July.
Noting that steps had to be taken to ensure that no investors is defrauded through fraudulent schemes, SEBI has directed JSV Developer and its three directors "not to collect any fresh money from investors from its existing scheme" and "not to launch any new association/scheme/plan or float any new companies to raise fresh moneys".
The company and its directors have also been asked not to dispose of any of the properties or alienate the assets of the existing scheme as well as not to divert the funds raised from public.
The orders have come into force with immediate effect and will apply until a final decision is taken in the matter.
Besides, the entities have been ordered to "immediately submit" the full inventory of the assets owned by JSV out of the amounts collected from the schemes and furnish all the information sought by SEBI including scheme wise list of investors, details of amount mobilised and refunded till date.
The market regulator had begun a probe into the matter after receiving a copy of order by Madhya Pradesh High Court from the Ministry of Finance, in 2012.
It was observed, among others, that the petitioners therein had filed a public interest litigation (PIL) seeking order of enquiry against various financial companies, including JSV Developer.
The petitioners had pleaded that thousands of persons of across Madhya Pradesh had been cheated by various finance companies under the garb of various schemes, which used to collect deposits from public with a promise to pay the money back with higher return of interest from 15-20%.
SEBI said that "the activity of fund mobilisation by JSV Developer with a resultant promise of returns clearly falls within the ambit of 'collective investment schemes' as defined in... the SEBI Act".
Following a circular from the market regulator, both BSE and NSE has asked all listed companies to strictly comply with corporate governance norms
Nudged by Securities and Exchange Board of India (SEBI) to step up their vigil against companies lacking good corporate governance practices, both BSE and National Stock Exchange (NSE) have asked all listed companies to ensure compliance in ‘letter and spirit’ to all relevant norms.
The latest directive by the two stock exchanges also comes ahead of a new Corporate Governance Code to be implemented by SEBI for all listed companies with effect from 1st October.
Last week, SEBI, in a strong-worded circular has asked bourses to step up and equip their monitoring framework to identify practices where certain companies were observed to have flouted listing agreement and other corporate governance rules, including those related to holding of annual general meetings (AGMs) of shareholders.
Taking forward SEBI’s directions, the NSE, in a circular, said “the companies are advised to ensure that the principles of corporate governance are followed in letter and spirit and comply with SEBI circular.”
In a separate circular, the BSE also asked the listed firms to “take note of the SEBI circular and comply accordingly.”
The SEBI had informed the stock exchanges that there had been cases when corporate groups with multiple listed companies have wrapped off various AGMs within time gaps of 15 minutes without giving enough discussion time to shareholders, numbering over a lakh.
“Such a practice affects the rights of investors to seek clarifications/hold discussions and prima-facie appears to be prejudicial to the interest of the investors,” SEBI had said in the circular to the stock exchanges.
There have been instances when multiple listed companies of a single corporate group held almost back to back AGMs on a single day with very short-duration time gaps.
The companies explain such practices by saying that their various listed companies mostly have common shareholders, while holding AGMs on single day and at single venue saves time and cost too.
As per norms, principles of corporate governance are to be mandatorily complied with by listed companies.
The COMPAT upheld an order passed by CCI, which had found NSE guilty of abusing its dominant market position in currency derivatives segment
The Competition Appellate Tribunal (COMPAT) on Tuesday upheld the directives passed by Competition Commission of India (CCI) against National Stock Exchange (NSE).
In June 2011, the CCI had imposed a penalty of Rs55.5 crore on NSE for 'abusing its dominant position in the currency derivative market by cross subsidising this segment of business from other segments where it enjoyed virtual monopoly'. MCX Stock Exchange (MCX-SX), in 2009 had filed a complaint alleging that NSE was indulging in unfair practices by waiving the transaction fee on currency derivatives.
Reacting on the COMPAT order, NSE said it would appeal against the decision. “NSE will appeal the order of COMPAT and we will do the needful after going through the detailed order. Whatever we have done was in the interest of the development of capital markets. A suitable review of the implications will be done in due course," the Exchange said in a statement.
In its order dated 23 June 2011, the CCI had imposed a Rs55.5 crore fine on NSE for abusing its dominant market position and asked the bourse to stop unfair trade practices like subsidising its services with a zero-price regime in the currency derivatives segment.
Imposing a penalty equivalent to 5% of the bourse's three-year average turnover, the CCI had said there was "a clear intention on the part of NSE to eliminate competitors in the relevant market".
The CCI order followed a months-long probe into the matter after a complaint from the NSE's younger rival, MCX-SX.
NSE, then challenged the CCI order before the COMPAT . During its first hearing in August 2011, the COMPAT granted a conditional stay on the Rs55.5 crore penalty order but asked the bourse to comply with the other directions of the fair-trade watchdog in this matter. The Tribunal also directed NSE to give an undertaking that it would have to pay the full penalty, along with interest at the rate of 9% per annum, if it loses the case.
The NSE and MCX-Stock Exchange (MCX-SX) had entered into currency derivatives trading in August 2008 and October 2008 respectively, followed by United Stock Exchange (USE) in 2010.
However, in November 2009, MCX-SX filed a complaint against NSE for abusing its dominant position and thus violating the Competition Act.
After a year-long probe, CCI found NSE guilty of anti-competition practices and penalised it for abusing its dominant market position.