Sebi cautions investors against illegal fund raising schemes

Concerned over a number of schemes floated by companies for illegal fund raising even after being barred to do so, regulator Sebi today cautioned investors and general public against dealing with such entities.
Making public a list of 95 entities, which included many from West Bengal, the capital market watchdog asked investors not to invest in their illegal schemes.
Sebi has asked investors to report such unauthorised money pooling activities to the market regulator, state authorities including police "immediately, along with appropriate details/documents".
The list of 95 entities banned by Sebi from raising funds include names like Wisdom Agro Tech India, Raghav Capital & Infrastructure, Adel Landmarks (Era Landmarks), RDPL Infrastructure, Agri Gold Farms & Estates, Saradha Realty India, Rose Valley Real Estate & Constructions and Sai Prasad Properties.

The companies and their directors have been restrained from collecting further money under existing/new schemes by the regulator through interim orders. Not just that, Sebi has put several restrictions on them.
Through its final directions, Sebi has barred these companies and their directors from accessing the capital markets, the regulator said, while explaining its enforcement procedures against such entities.

Further, Sebi had directed some of these companies to wind up their unregistered schemes and repay investors.
In a statement issued today, Securities and Exchange Board of India (Sebi) has cautioned investors not to invest in schemes offered by entities barred by it from raising money or entities not registered with the regulator.

The markets regulator, since January 2011, has passed orders against 95 entities and their respective directors carrying on unregistered 'Collective Investment Schemes (CIS).
Of these, orders have been passed against 43 entities in the first 10 months of 2015 itself.
Sebi further said that Gift Collective Investment Management Company Ltd is the only company registered with it to undertake CIS activities.
Further, investors are advised to bear the cautionary checks like whether the entity is registered with Sebi, and whether the scheme has filed an offer document with the regulator before investing in a CIS.
"...Subscription to CIS units is permitted only though a banking channel, no cash transactions are permitted... No guaranteed or assured returns are permitted (at most, an indicative return may be stated in offer document)," Sebi noted.