Cracking its whip on a ponzi scheme promising huge returns through 'goat farming', Sebi today asked a company and its six directors to wind up their operations and refund investors' money within three months.
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The operators of this scheme -- which involved promise to double the money within four years on a minimum investment of Rs 6,000 per goat -- have also been barred from securities markets till all their illicit collective investment schemes are wound up and the money is refunded to their investors.Besides, the Securities and Exchange Board of India (Sebi) has also warned of further prosecution proceedings against these entities. It would refer the matter to the police for filing of criminal case and to the Corporate Affairs Ministry for winding-up process, if Sebi orders are not complied with.
Sebi has warned that the company and its directors can be charged with "offences of fraud, cheating, criminal breach of trust and misappropriation of public funds" if they fail to wind up their schemes and refund the investors' money.
Sebi had first issued notices to Beetal in August 2010 after it noticed that the company was soliciting contribution from general public to invest in goat farming and assuring returns up to 2 per cent per month and promising an amount double of investment in 4 years, secured with bank guarantee.
On examination of documents and information available on record, Sebi prima facie observed that the schemes floated by Beetal were in the nature of 'collective investment scheme'. Beetal was undertaking such activities without obtaining certificate of registration as required under Sebi Act and the CIS Regulations, it was found.
Subsequently, SEBI issued show cause notices in May 2012 to Beetal and its directors. As the notices could not be delivered on the available addresses, Sebi published public notice in Hindi and English newspapers in November 2012.
Three directors subsequently submitted their replies and claimed they were not associated with the company. One of them said he was an illiterate person and had sold his goat to one person and had given him his ID proof in this regard.
Sebi observed that Beetal was inviting general public to invest in its scheme through newspaper advertisements and was promising guaranteed return on a minimum investment of Rs 6,000. The company's website also displayed claims that "we use your precious money in Goat Farming... Our Group gives monthly return by providing Goat care services."
After looking into the entire case, Sebi said in its seven-page order that it was giving "benefit of doubt" to the two directors who served on Beetal board only for three days.
