PACL, Raghav Capital, Emerging India, BNP India Developers & Infrastructure, Popular Agro, USK India, IHI developers, Samruddha Jeevan Foods, Yatra Art Fund, Wisdom Agrotech and JSR Diaries, were garnering money through unauthorised CIS last year.
Taking strict action against illicit money pooling schemes, capital markets regulator Sebi has clamped down on over 60 companies in the first eleven months of 2015 for raising crores of rupees from investors.
In comparison, 45 firms were penalised by the regulator in the entire 2014 for raising money through Collective Investment Schemes (CIS). As per the data available with the Securities and Exchange Board of India (Sebi), more than 60 companies had raised money through CIS between January and November 2015.
Among others, PACL, Raghav Capital, Emerging India, BNP India Developers & Infrastructure, Popular Agro, USK India, IHI developers, Samruddha Jeevan Foods, Yatra Art Fund, Wisdom Agrotech and JSR Diaries, were garnering money through unauthorised CIS last year.
Besides barring all these firms from mobilising further funds from investors, these companies and their directors have also been restrained from accessing the securities market. While further proceedings are underway in many cases, some of them have also been asked to wind up their existing illegal money pooling schemes and repay investors their money with interest.
Apart from that, several restrictions have been imposed by Sebi on these firms through separate orders. These companies were raising capital through unauthorised CIS without taking necessary regulatory approvals, thereby violating the provisions of the Companies Act, besides applicable Sebi regulations.
Promising high returns to the investors, these firms had raked in unauthorised funds through various mechanisms. The capital was raised through realty schemes and 'buffalo purchase', among others.
Collectively, these firms have mobilised crores of rupees from the investors and PACL alone raised Rs 49,100 crore.
With regard to PACL case, Sebi has slapped a fine of Rs 7,269.5 crore on the company and its four directors for illegal and fraudulent mobilisation of funds from the public. Last year, PACL was asked to refund Rs 49,100 crore it had collected through illicit schemes over a 15-year period.
Through a new Securities Laws Amendments Act, the government had enhanced powers of Sebi to take action against illegal money-pooling activities involving Rs 100 crore or more. The Act also provides for setting up of a special court to expedite the cases filed by Sebi.
In 2015 itself, a special court started functioning in Mumbai and cases filed by Sebi are being heard on a daily basis.
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