In the high-profile Saradha Realty case, markets regulator Sebi today imposed a fine of Rs 2 crore on the company, its chief Sudipta Sen and two directors for failing to comply with its earlier directions to wind up illicit money-pooling schemes and refund the investors.
Saradha Realty, as also its promoters and directors, were asked by Sebi through an order in April 2013 to wind up all existing collective investment schemes and (CIS)to refund the money collected from investors, with returns, within three months.
Sebi order had followed a huge furore in Kolkata and other parts of West Bengal at that time about the massive funds collected by Saradha group through various schemes, including those relating to real estate and hospitality projects, and the subsequent alleged non-payment of returns to investors.
The matter had also escalated into a huge political controversy, resulting into probe by various investigative and enforcement agencies including Sebi.
In an order passed today, Sebi has imposed a penalty of Rs 2 crore on Saradha Realty India Ltd, its Managing Director Sudipta Sen and directors - Hemanta Pradhan and Monoj Kumar Nagel.
The Securities and Exchange Board of India (Sebi) said these entities had failed to comply with the directions issued by it and carried on as an unregistered CIS.
According to the regulator, Saradha Realty is engaged in the fund mobilisation activity from public through investment contracts by floating CIS and it had launched such scheme without obtaining certificate from Sebi.
"I am of the view that upon such conclusion and upon being so directed to comply with directions as mentioned in aforesaid order, if the company/ its directors fail to wind up its existing CIS, fails to refund the money collected by it under the schemes with returns...And fails to submit a winding up repayment report to Sebi...Within a period of three months from the date of order, then, it means, its status is still alive as unregistered CIS," Sebi General Manager and Adjudicating Officer Rachna Anand said in an order.
Also, status of Saradha Realty is still shown as active at the MCA website. Therefore, continuing with such status without having registration certificate from Sebi is in contravention of Sebi Act and CIS regulation, she added.
The markets regulator said that non-winding up and not
refunding the money due to the investors were certainly causing loss to the investors and is an unlawful gain to the company and its directors.
"Further, not heeding towards the directions issued under Sebi order and acting as unregistered CIS, is certainly a serious irregularity affecting the interest of numerous investors at large. I cannot ignore the gravity of this matter as no compliance of direction is met till date after lapse of more than 3 year which certainly warrants the maximum penalty as stipulated in ...Sebi Act to commensurate the violations committed," Anand said.
Besides, Sebi has not penalised six other persons as they were not directors at the relevant point, while another was secretary of the company.
These six people were "shown to have ceased as directors well before the date of said Sebi order".