Sebi directs Religare Art to refund investor's money

Bars it from accessing securities market for violating rules on collective investment schemes

The Securities and Exchange Board of India (Sebi) on Thursday directed Religare Art Investment Management to refund all the money it had collected from investors, with interest, within three months. The regulator has also barred the firm from accessing the securities market, for violating rules on Collective Investment Schemes (CIS).

This is other instance where Sebi has taken action against an art fund, after it had barred Osian's-Connoisseurs of Art, Yatra Art fund.

The regulator has alleged Religare Arts had sponsored an unauthorised CIS without obtaining certificate of registration from it. Religare had collected money from investors and had used the same for its unregistered and illegal schemes.

Sebi has asked the Art Fund to abstain from collecting any money from investors or launch any CIS. It has also been directed to immediately ssend a compliance report to Sebi, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds.

Religare Art Fund had collected contributions only in one scheme by the name ‘Pratham’. The object was to hold, invest and trade in art. It has also been said that there were 43 beneficiaries who had contributed a total of Rs 11.49 crore in the said scheme.

Religare Arts to immediately be restrained from accessing the securities market and would further be prohibited from buying, selling or otherwise dealing in securities market till all the CIS of Art fund are wound up and all the monies mobilised through such schemes are refunded to its investors with returns which are due to them, as per the Sebi order. Regulator to also initiate attachment and recovery proceedings under the Sebi act framed thereunder, it added.