The market regulator has sought details from Artha Property for its Blue Mountain Estates scheme in Ooty to see if it falls under the ambit of a collective investment scheme
Market watchdog Securities and Exchange Board of India (SEBI) has initiated a preliminary enquiry into the Artha Group’s Blue Mountain Estates project, according to SEBI sources. The enquiry is aimed at finding out whether the project in Ooty falls under the ambit of a Collective Investment Scheme (CIS), and if so, whether it should be registered under the CIS rules of SEBI. The company had told Moneylife earlier that the scheme does not fall under the CIS category.
“This is not (a) collective investment scheme. Each customer buys his/her own piece of land, which will be demarcated and be identifiable. The nature of transaction is that of outright purchase of land and Artha facilitates the purchase of plots and hence (this) is not an investment scheme but land purchase,” asserted Suresh Rangarajan, managing director and chief executive officer of the Artha Group in an email to Moneylife. Artha Group has interests in real estate, insurance, loans and an online money management service. It has been substantially funded by the Times of India group.
SEBI defines CIS as: “Any scheme or arrangement made or offered by any company under which the contributions, or payments made by the investors, are pooled and utilised with a view to receive profits, income, produce or property, and is managed on behalf of the investors is a CIS. Investors do not have day-to-day control over the management and operation of such scheme or arrangement.” Any company floating a scheme, which invites deposits from the public as a CIS has to obtain SEBI’s permission. No entity can mobilise any money from the public or from investors unless the scheme is assigned a rating from a credit rating agency registered with SEBI.
“Blue Mountain tea estates are sold as plots of land. Customers have full freehold legal titles for the land and can freely transfer the sale deeds. It is typical of a property purchase and does not guarantee any recurring returns. Nor does it guarantee any fixed capital appreciation. It is like a typical property asset purchase and the customer is free to use the same in the manner he/she deems it fit. Upon payment of full consideration, the plot of land is transferred and registered in the name of the customer. The objective of this project is to offer customers an opportunity to own half or one acre of a plot of land at a hill station and combine holidays with capital appreciation,” said Mr Rangarajan.
According to Artha, after investing in a plot, the person becomes a co-owner of the land. The customer is also entitled to a 50% share in profits from all the produce generated from the plot of land.The day-to-day maintenance like planting, harvesting and processing can be contracted to a care taker.The scheme claims to offer a regular income. The customer has an option to sell the land anytime. The land costs Rs9.9 lakh for one acre. Moneylife gathers that the Artha scheme has been cleverly formulated by the company so as to apparently fall outside SEBI’s rules.
Unless all documents are verified, one is not supposed to use a prepaid SIM card to make and receive calls. However, in reality, you can use any prepaid card without getting your documents verified, for one or two days
Regulators like the Reserve Bank of India, the Securities and Exchange Board of India (SEBI) and the Telecom Regulatory Authority of India (TRAI) are insisting on strict implementation of know your customer (KYC) norms. However, in practice, these norms are not being followed vigorously.
In the case of prepaid subscriber identity module (SIM) cards, it is observed that you cannot only buy, but also use these cards for making and receiving calls for a few days before the verification of documents. Usually, verification of documents for a new prepaid SIM card takes one or two days and the subscriber can make and receive calls during this period. This may be used by anti-social elements for any purpose like extortion and even by militants for spreading terror.
"We just need documents like a filled-up application form, address proof and photo-identification from a customer for selling prepaid SIM cards. We do not bother to check whether the person buying a prepaid SIM is the same person whose documents have been submitted," said a retailer, who did not want to be named.
Agents, who roam from one retailer to the other, collect these documents and send them to the company. The representative from the mobile service provider then checks these documents for any error and marks it as verified. In case there is an error, then the representative calls up the subscriber and asks for rectification. In the meantime, the subscriber can use his new SIM card for making or receiving calls. In short, this can be used by anti-social elements as a 'use-and-throw' type of service.
According to a customer care executive from Reliance Communications, the company tries to provide permanent connection on the same day. Its representative visits the subscriber's place and then sends a positive address verification report (AV report). In case the report is negative, then the customer is asked to submit the correct documents. "Usually when we feed the document details in our systems, we immediately come to know whether that particular address is valid or not. In case it is not valid then we immediately deactivate the number," the executive said. However, he admitted that during the buying and verification process, the customer can make and receive calls, without any problem.
Further, since there is no check on whether the buyer is the same person whose documents have been submitted, the connection can be misused. This could become a constant worry for people who have lost their ID proof like driving licence or PAN card as one is not sure if the document is being misused for buying SIM cards or not.
Unfortunately, there is no central database of mobile subscribers. So you cannot check if any other mobile number has been issued in your name.
In case you have lost any of your documents that can be used for purchasing a mobile connection, file a first investigation report (FIR) at the nearest police station. It may come in handy in case someone is misusing your documents for buying and using a new prepaid SIM card.