Sebi asks USK and its directors to refund money and bans for 4 years

Markets regulator Sebi today ordered USK India and its three directors to refund within three months the investors' money that the company raised through an illegal collective investment scheme (CIS).

The regulator has also barred the four entities from the capital market "till the directions for refund/repayment to investors are complied with... And for a further period of four years from the date of completion of the refund".

Moreover the directors -- Sanjay Verma, Shiv Ram Singh Tomar and Umesh Narwariya -- have been restrained from holding position as directors or key managerial personnel of any listed company for a period of four years, Sebi said in an order.

According to an interim order passed by Sebi in 2015, the entities were engaged in carrying out a scheme of Purchase, development and maintenance of land' under various plans, wherein money was mobilised from the public.

After noting that the fund mobilising activity of the firm fell within the parameters of CIS, which was being carried out without getting registration from Sebi, the regulator had directed the company and its directors not to collect fresh money from investors from the existing scheme, among others, in the interim order.

In the fresh order, Sebi reiterated that the activities of the firm and its directors constitute a CIS and these have been carried out without seeking a registration from Sebi, thereby contravening the CIS norms.

The firm and its directors are "jointly and severally" liable to wind up the USK's collective investment scheme and refund the money collected under the scheme with returns which are due to the investors within a period of three months, Sebi said.

The firm and its directors failure to comply with Sebi's directive, would initiate recovery proceedings against them, added regulator.