Regulations
SEBI bars Susk India from collecting money from investors
According to SEBI investigation as on March 2011 Susk India had collected Rs1.29 crore from investors as advance booking for plots, however, the company acquired land worth only Rs15.19 lakh
 
Market regulator SEBI in an interim order cum show cause notice has asked Susk India Ltd and its directors and promoters not to collect any fresh moneys from investors from its existing scheme, not to launch any new scheme or plan and not to float any new companies or firm to raise fresh money from investors.
 
The company was prima facie found to be engaged in fund mobilising activity from the public, by floating, sponsoring and launching collective investment scheme (CIS) as defined in Section 11AA of the SEBI Act without obtaining a certificate of registration from SEBI as required under Section 12(1B) of the SEBI Act and the CIS Regulations.
 
SEBI received a complaint on 20 December 2013, alleging fund mobilisation by Susk India from the public, towards their scheme of selling of plots. The complainant also forwarded the brochure of Susk India, "Certificate" issued by it in favour of an investor,  "Acknowledgment slip",  blank "Application form",  "Deposit Slip",   etc.  It was also alleged that Susk India does not own any land/property. SEBI immediately started its investigation of Susk India.
 
Based on its investigation SEBI observes, “It  is  apparent  from  the  scheme  offered  by  Susk  as  noted  from  the  brochure,  Application Form,  Agreement,  and  the  Certificate  that  the  company  is  collecting  funds  from  general public  towards  its  scheme  for  the  sale/purchase,  development  and  maintenance  of  land  through various plans (lump sum and instalment plans). Various clauses of the Application Form state that the funds are utilized for land purchase and land development expenses.  As per the terms and conditions mentioned in the certificate and application, the land shall be allotted (by way of an allotment letter) in the name of the applicant in case of lump sum payment after 180 days of receipt of full payment but in case of instalment payment plans land shall be allotted after 60 days of receiving of 60% of consideration amount.  It  is  however  observed  that  none  of  the  aforesaid  documents  of  the company specify any time period within which the land/plot is to be actually transferred to the applicant/investor by way of a sale deed. It is further noted from the Certificate issued by the company (provided by the complainant) which acknowledges the receipt the 1st instalment does not contain any details of the location of the plot.  The company in its replies admitted that  they  have  mobilised  money  from  general  public  for  provisional  allotment  of  plot  by soliciting advance payments under its schemes of instalment payment plans and allotted the plots.  It is relevant to note that the company was soliciting money without having any land in its possession.  The company acquired land at Abhanpur (CG) on  22 November 2010 whereas it started pooling money  from  general  public  from  May  2010  onwards.  From  the  balance  sheet  for  the  year ending  on  31 March 2011,  it  can  be  seen  that  the  company  had  collected  a  sum  of Rs1.29 crore  for advance booking of plots.  At that point in time, the company acquired land worth only Rs15.19 lakh.  All  these  factors  mentioned  above,  clearly  indicate  that  Susk  India  was  pooling money in the form of  advance consideration for selling of plots to general public and utilising the same for the purposes of such schemes. Therefore,  it  is  clear  that  the  payments  or  the  contributions  collected  from  the applicant/investor  are  pooled  and  utilized  by  Susk  India  for  the  purpose  of  scheme.  The instant  'scheme',  therefore  satisfies  the  first  condition of  pooling  of  contribution  or  payments, stipulated in Section 11AA(2)(i) of the SEBI Act.”
 
At this point, the SEBI Order points out the contravention of law on the part of Susk India by saying, “I note that in terms of Section 12(1B) of the SEBI Act, no person shall sponsor or cause to be sponsored or  cause to be carried on a 'collective investment scheme' unless he obtains certificate of  registration  from  the  Board  in  accordance  with  the  regulations.  Regulation  3  of  the  SEBI (Collective  Investment  Schemes)  Regulations,  1999  provides  that  no  person  other  than  a  Collective  Investment  Management  Company which has obtained a certificate under the said regulations shall carry on or sponsor or launch a  'collective investment scheme'.  Therefore, a person can launch or sponsor or cause to sponsor  a  'collective  investment  scheme'  only  if  it  is  registered  with  SEBI  as  a  Collective Investment Management Company. In view of this, 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.”
 
Hence the SEBI Order barring the company from collecting money from investors and its further restrictions: “not to dispose of any of the properties or alienate the assets of the existing scheme;   not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of the company; to immediately submit the full inventory of the assets owned by  Susk India out of the amounts collected from the "customers"/investors under its existing schemes; and  to furnish all the information sought by SEBI.”
 
The SEBI Order concludes with the words, “This  Order  shall  also  be  treated  as  a  show  cause  notice.  Susk  India  and  its  Promoters/Directors may show cause as to why appropriate directions under the SEBI Act and CIS  Regulations  including  directions  for  winding  up  of  such  plans/ schemes  in  terms  of Regulations 65 and 73 of the CIS Regulations should not be issued against them.”
 

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COMMENTS

integrity

2 years ago

Every other day we get the news of SEBI barring one entity or other from collecting fund, but could not bar Sahara from collecting fund disguised as new "schemes" but very much the same for all practical purposes.

FIFA secretary general Valcke dragged into bribery row

SAFA requested FIFA to deduct $10 millions from the $423 millions due to the organisers of the 2010 World Cup

 

FIFA secretary general Jerome Valcke was on Tuesday dragged into the bribery controversy that has engulfed world football's governing body after being linked to a $10 million payment.
 
America's domestic intelligence and security service, Federal Bureau of Investigation (FBI), which is looking into the multi-million-dollar monetary scandal, believes the amount was made as a bribe by the South African Football Association (SAFA) via FIFA's bank account in Zurich to former FIFA vice president Jack Warner, also the head of the Caribbean Football Union.
 
SAFA requested FIFA to deduct $10 millions from the $423 millions due to the organisers of the 2010 World Cup.
 
The payment followed a letter from South Africa FA president Molefi Oliphant to Valcke, asking for the payment to be withheld from World Cup funds and paid instead to Warner to support football in the Caribbean.
 
American prosecutors allege that the South African government paid $10 million in bribes to Warner and other football officials in order to secure their votes for South Africa to host the 2010 World Cup.
 
The FBI believes Valcke authorised the payment, the New York Times reported on Monday. The payments were allegedly disguised as money to "support the African diaspora".
 
A FIFA statement said Valcke was not involved, but that the payment was made at the request of the South African government and SAFA.
 
"The letter is consistent to our statement where we underlined that the FIFA Finance Committee made the final approval," the FIFA statement said on Tuesday.
 
Valcke has denied to the New York Times that he was the "high ranking official" and said he did not have the authority to order the payments.
 
"The payments totalling $10m were authorised by the then chairman of the Finance Committee and executed in accordance with the Organisation Regulations of FIFA," the statement said.
 
"Neither the Secretary General Jerome Valcke nor any other member of FIFA's senior management were involved in the initiation, approval and implementation of the above project."
 
Valcke has not been charged with any crime nor has the US made any public allegations against him.

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Call drops can invite penalties: Prasad
The frequent call drops which mobile phone users face today may soon invite a penalty for service providers, Communications and IT Minister Ravi Shankar Prasad said on Tuesday, while announcing free roaming facility by the state-run national telecom provider BSNL from June 15.
 
The minister, talking to media persons on the completion of one year of Prime Minister Narendra Modi's government, said the issue of net neutrality was being discussed internally in his ministry and a final decision will be taken soon by the union cabinet.
 
"Call drops need to get minimised. We are in discussion for a structure to incentivise or disincentivise it," Prasad said, when asked what the government was doing to check this irritant.
 
The minister said there were many ongoing campaigns regarding the adverse impact of mobile tower radiation. "If someone comes to me with a problem, I am ready to look at it...."
 
But he mentioned that if people complained about the ill-effect of mobile towers and asked for pulling them down, then they should not be complaining about call drops as both things do not go hand-in-hand.
 
In April 2015, India crossed over 100 crore telephone connections.
 
Prasad mentioned that BSNL has installed 15,000 new towers in one year to do away with call drops.
 
Talking about the controversial net neutrality issue, the minister said the committee set up by the Department of Telecom has submitted reports to the government. "The final decision on it will be taken by the government and the cabinet."
 
He said BSNL's revenue grew by 2.1 percent in 2014-15 reversing the trend of negative growth in previous years. The state-run service provider also added 47 lakh active subscribers during that period.
 
BSNL and MTNL have launched unlimited free local calls from landlines to any landline or mobile during night hours effective from May 1, 2015.
 
Listing the achievements, Prasad said foreign direct investment in the telecom sector had topped $2.85 billion in 2014-15 and that this was the highest in recent years -- $1.31 billion in 2013-14, $304 million in 2012-13, $1.99 billion in 2011-12 and $1.66 billion in 2010-11.
 
Talking about the Digital India programme of the government, the minister mentioned that it is for the poor and marginalised in the country. "It is party neutral and ideology neutral."
 
Alluding to the 2G telecom cases pending before the various courts for alleged improper allotment of spectrum and graft, the minister said he had taken over the reins of the ministry when it was making news for wrong reasons for a variety of factors.
 
"When I took over a year ago the department was in news for all reasons. But now we have faith, hope and confidence and there is collective will to work in a transparent way. There is no place for lobbyists and middlemen in the telecom, IT and India Post departments," he said.

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