Alchemist Holdings' licence cancelled on supervisory grounds

Company, following cancellation cannot transact the business of non-banking financial institution: RBI

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The Reserve Bank has cancelled registration certificate of Delhi based non-banking financial company Alchemist Holdings Ltd on supervisory grounds.

"The Reserve Bank of India has cancelled the certificate of registration of the following non-banking financial company (NBFCs) in exercise of the powers on supervisory grounds," it said in a release.

RBI said following cancellation of registration certificate, the company cannot transact the business of non-banking financial institution.

The licence of the company was cancelled on June 26, 2014, as per the RBI. Alchemist Holdings is authorised to operate as NBFC to carry on business without accepting public deposits.

As part of its efforts to protect gullible investors from fraudulent investment schemes, the RBI has started scrutinising credentials of companies suspected of illegally raising money from public as NBFCs.

The RBI action follows Corporate Affairs Ministry sending a list of more than 34,700 firms that came under its scanner for allegedly pooling money as non-bank finance companies (NBFCs).

The Ministry had prepared the list early last year when Rs 10,000-crore Saradha chit fund scam -- that duped thousands of investors of their hard earned money -- came to light.

About a year ago, capital markets regulator Sebi had barred Alchemist Holdings and its seven directors from raising any money from investors and asked them not to divert any funds or dispose any properties till further orders.

The action against Alchemist Holdings, which was found to have collected more than Rs 400 crore through unauthorised schemes, was followed after a regulatory order passed by Sebi in June, 2013 against Alchemist Infra Realty Limited for raising over Rs 1,000 crore through illicit schemes.

The two companies have common directors between them.

"An investor/applicant is misled to believe that the company, Alchemist Infra Realty Ltd, is part of the Alchemist Group, whereas the company has contended (before Sebi) that it is not associated with the Alchemist Group," Sebi had said.

The Alchemist Group is headed by industrialist Kanwar Deep Singh, also known as K D Singh, an Indian businessman turned politician and Member of Parliament, Rajya Sabha.