Sebi cautions investors against Sumangal Industries' schemes

Firm has defaulted Sebi order asking it to wind up its collective investment schemes and repay investors

Having slapped orders against Sumangal Industries for running illicit money-pooling schemes, markets regulator Sebi today cautioned general public against any collective investment schemes run by the company and entities associated with it.

In a 'caution notice' issued today, Sebi said that it had passed an order in July 2013 against Sumangal Industries, wherein, the firm, its promoters/directors were directed to wind up the existing Collective Investment Schemes (CIS) and refund the money to investors within three months.

However, the company and its promoters/directors have not complied with Sebi's directions.

According to Sebi, Kolkata-based Sumangal Industries was running an illegal 'potato purchase' investment scheme promising up to 100 per cent gain in just 15 months to investors.

"It has now come to our notice that another entity by the name Sumangal Agriculture Welfare Trust of India is proposing to launch a scheme which is similar in nature to the scheme launched by Sumangal Industries, against which Sebi has already passed an order," the regulator noted.

Cautioning general public, the capital markets watchdog said that Sumangal Agriculture Welfare Trust is neither registered with Sebi as a Collective Investment Management Company under Sebi regulations nor taken any approval of offer documents under CIS norms to raise funds from the public.

Further, the Trust has been prohibited from mobilising money from investors by virtue of order passed in July 2013, wherein Subrata Adhikary, a trustee of Sumangal Agriculture Welfare Trust and also a director of Sumangal Industries, has been barred from the securities markets till such time it complies with Sebi's order.

"...Investors are advised not to subscribe to the purported scheme proposed to be launched by Sumangal Agriculture Welfare Trust," the Securities and Exchange Board of India (Sebi) noted.