After money-pooling schemes linked to goats, cows and emu birds, regulator Sebi has now clamped down on operators running a scheme linked to Jatropha plants wherein gullible investors were being promised tripling of money in seven years by investing in these plants.
The company running such a scheme, Delhi-based Sunshine Global Agro Limited (formerly known as Sunshine Forestry Private Ltd) was found to have collected money from close to 40,000 investors, asking them to purchase Jatropha plants for Rs 1,000 each and promising them that the plants would be worth Rs 3,000 each after maintenance for seven years.
Jatropha, a wild green shrub largely found in arid and hot regions like Egypt, India and Madagascar, gained economic significance in 2007 when global investment banking major Goldman Sachs predicted that Jatropha can be one of the best candidates for future bio-diesel production.
Over the years, many governments across the world also launched special programmes for Jatropha plantations and mandatory blending for biofuel production, but the results were later found to be far from encouraging.
Apparently taking benefit of the hype around biofuel connection of Jatropha plants, some private operators launched their own schemes to collect money from gullible investors in the name of Jatropha plantations.
In its probe against Sunshine Global, Sebi found that the company was mobilising funds under its schemes "sale of Jhatropha Bush Group and sale of plant/trees", which were in the nature of unauthorised 'Collective Investment Scheme (CIS)'.
Sebi has directed the company and its directors --Lekh Narayan Chand, Mokarram Mohammad, Mohammad Ahteshamul Haq, Anand Kumar Jha, Wasim Khan and Ashif Khan--not to collect any money from investors and not to launch any new scheme.
Besides, the company has been asked to immediately submit the full inventory of assets owned by it out of the amounts collected from the investors under the existing schemes.
Earlier, there have been cases of illicit money-pooling schemes with returns being promised on the basis of investment in purchase and rearing of emu birds, goats and cows.
As per Sebi's order, Sunshine Global Agro and its directors have also been barred from diverting the funds raised from the scheme as well as from disposing of any asset with respect to the plan.
The directions will take effect immediately and will be in force until further orders.
Sebi received a communication in December 2012 alleging illegal mobilisation of funds by Sunshine Global Agro through its short term unit plan and unit plan "Jathropha bush group plant sale" which appeared to be in the nature of CIS.
The regulator said that the list of buyers provided by the company itself showed that there are 39,290 customers/ buyers from whom Sunshine had collected an amount of over Rs 38 crore as on December 31, 2013.