Dairy scheme: Sebi asks HBN Dairies to refund money by Mar 9

Cracking the whip on an over Rs 1,100 crore investment scheme involving purchase of cattle to earn huge returns from sale of ghee, Sebi today asked HBN Dairies & Allied to refund investors money by March 9, this year.
The Delhi-based firm and its directors have also been barred from the capital markets for a period of four years while they have also been restrained from launching any Collective Investment Schemes (CIS).
A probe by Securities and Exchange Board of India (Sebi) had found that HBN Dairies and its directors were mobilising funds from public through a dairy scheme without requisite approval from the market regulator.

Pursuant to the passing of the directions of an interim order (July 12, 2013) barring the company from raising funds, HBN Dairies had made a repayment proposal to Sebi wherein it had proposed to repay the amount of Rs 1,136.78 crore in a phased manner in consonance with realisation of its assets.
Sebi had issued detailed procedure for making repayments on January 6, 2014 to the company.
In its ruling today, the regulator noted that "HBN failed to comply with the directions of Sebi issued vide order... dated July 12, 2013 read with the Repayment Procedure forwarded to HBN on January 6, 2014".

Accordingly, Sebi has asked HBN Dairies and its directors -- Harmender Singh Sran, Amandeep Singh Sran, Manjeet Kaur Sran and Jasbeer Kaur -- "shall forthwith wind up the existing Collective Investment Schemes and refund the money collected ...With returns which are due to its investors as per the terms of offer, on or before March 9, 2015".

The company would have to submit a repayment and winding up report including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging the repayment.
Further, HBN Dairies and its directors have to "abstain from collecting any money from the investors or launch or carry out any Collective Investment Schemes including the scheme which have been identified as a Collective Investment Scheme in this order".

"HBN Dairies & Allied and its directors/ former directors namely Harmender Singh Sran, Satnam Singh Randhava, Amandeep Singh Sran, Gajraj Singh Chauhan, Manjeet Kaur Sran, Jasbeer Kaur, Rakesh Kumar Tomar, Sukhdev Singh Dhillon and Sukhjeet Kaur are restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of four years," Sebi said.
Sebi would initiate attachment and recovery proceedings, besides registering a civil/ criminal case against HBN Dairies, among others, if the company fails to comply with the regulators orders.
Sebi noted that HBN Dairies had claimed that the investors have been repaid in January 2014. However, the cheques were issued in March 2014 and the bank account statement of the company showed that the cheques were returned in June 2014, in case of certain investors.