Sebi bars past directors of Shri Ram Real Estate from raising funds from market
18 Jan 2016
Market regulator Securities and Exchange Board of India (Sebi) has barred past directors of Shri Ram Real Estate and Business Solutions Ltd (SRREBSL) - Bhuvneshwar Prasad Sahu, Rajesh Kumar Bhagat, Vikram Singh, Man Singh Verma, Hemant Bhagat, Gyan Singh - from mobilizing funds from the market after they were found to have engaged in carrying on 'collective investment schemes' illegally.
Sebi said the company and its directors through various payment plans camouflaged as real estate schemes (without the certificate of registration granted by Sebi), have violated the provisions of the SEBI Act and CIS Regulations.
In addition, under the Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 (PFUTP Regulations), which prohibits manipulative, fraudulent and unfair trade practices, dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include, illegal mobilisation of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective investment scheme by any person.
Bhuvneshwar Prasad Sahu, who was director at the time is also accused of violating Regulation 4(2) (t) of PFUTP Regulations.
Sebi said, protecting the interests of the investors is its first and foremost mandate and therefore, has to take immediate steps to prevent activities, if companies or persons indulge in defrauding the investors and damage the orderly development of the securities market.
In order to ensure that these past directors do not collect further funds through any new company or by associating with any company and to safeguard the assets / property acquired by them from the funds of the investing public, it becomes necessary for Sebi to take urgent preventive action.
Sebi has issued an interim order against these directors for preventing them from further carrying on with the fund mobilising activity by launching 'collective investment scheme', without obtaining registration from Sebi in accordance with law.
They have also been asked not to dispose of or alienate any of the properties/assets obtained directly or indirectly through money raised by SRESBL;
Sebi has sought full inventory details of all their assets and properties. Also, the directors have been asked to furnish their Permanent Account Number (PAN) to Sebi.
The above directions will take effect immediately and shall be in force until further orders.
These past directors of SRREBSL have been asked to file their reply within 21 days from the date of receipt of this order, if any, to this order and also indicate whether they desire to avail themselves of an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.