Cattles sold for 'ghee' investments; Sebi smells ponzi at play

As per latest financial details accessed by Sebi, 'Cattles & Ghee' had mobilised a total amount of Rs 745 crore as on March 31, 2011

A bizarre investment scheme has come under market watchdog Sebi's scanner, wherein hundreds of crores have been raised through public deposits for purchase of cattles with a promise of more than doubling the money through returns linked to the ghee produced by them.

As per the latest financial details accessed by Sebi, the scheme named 'Cattles & Ghee' had mobilised a total amount of Rs 745 crore as on March 31, 2011. Further funds could have been garnered from the depositors since then.

Fearing a 'Collective Investment Scheme (CIS)' being run without its approval, Sebi began probing the case after receiving investor complaints but its show-cause notices sent to many directors of the company operating this scheme has remained undelivered for many months.

The latest summons in this case were issued by Sebi last month, wherein the regulator had asked the directors of this company, named HBN Diaries & Allied Ltd, to appear before it on May 29. However, the summons could not be delivered to at least three of the directors.

Emailed queries sent by PTI in this regard to the company and phone calls made to the numbers given on its website remained unanswered.

As per its website, New Delhi-based HBN claims to be in dairy business since late 90s with dairy farms in Samalkha (Haryana) and Gannaur, among other places.

However, Sebi said in its show-cause notice that the company was raising money from public depositors in the name of purchasing cattles with a promise of money getting double or even more at the time of maturity.

The company claimed to link the promised maturity amount to the expected price of cattle and ghee at that time and promised to secure the actual investment even if it was withdrawn in a month's time. The schemes were offered for periods ranging from one month to nine years.