CIS: Sebi clamps down on 25 companies in Apr-Sep FY16

Weeding out illicit money pooling schemes, capital markets regulator Sebi has clamped down on over 25 companies in the first half of the current fiscal for raising crores of rupees from the investors.
As per the data available with the Securities and Exchange Board of India (Sebi), more than 25 companies had raised money through Collective Investment Schemes (CIS) between April to September this year.
The watchdog has barred all these firms from mobilising further funds from investors, while these companies and their directors have also been restrained from accessing the securities market.
Some of them have also been asked to wind up their existing illegal money pooling schemes and repay investors their money with interest, while further proceedings are underway in many other cases.

Apart from that, several restrictions have been imposed by Sebi on these firms through separate orders.
These companies were raising capital through unauthorised CIS without taking necessary regulatory approvals.

By indulging in such activities, these firms have also violated the provisions of the Companies Act, besides applicable Sebi regulations.
Among others, PACL, Angela Agrotech, Citrus Check Inns, IPN developers, Samruddha Jeevan Foods, Emerging India, USK India, IHI developers and Popular Agro were garnering money through unauthorised CIS.
These firms had raked in unauthorised funds promising high returns to investors. The capital was raised through realty schemes and 'buffalo purchase', among others.

Collectively, these firms have mobilised crores of rupees from the investors and PACL alone raised Rs 49,100 crore.
With regard to PACL case, Sebi has slapped a fine of Rs 7,269.5 crore on the company and its four directors for illegal and fraudulent mobilisation of funds from the public, saying the company deserves "maximum penalty" for such large-scale duping of the common man.
The penalty follows another order by Sebi last year wherein PACL was asked to refund Rs 49,100 crore it had collected through illicit schemes over a 15-year period.
Through a new Securities Laws Amendments Act, the government had enhanced powers of Sebi to take action against illegal money-pooling activities involving Rs 100 crore or more. The Act also provides for setting up of a special court to expedite the cases filed by Sebi.