Markets regulator Sebi on Tuesday barred Yalsco Real Estate and Agro Farming and three individuals from accessing securities market for a period of 4 years for mobilising funds from the public through illegal collective investment schemes.
Prem Lal Dewangan, Mamta Dewangan and Nisha Dewangan are the directors of Yalsco who have been barred.
Among other directions, the regulator asked them not to launch any new collective investment schemes without seeking registration from Sebi under CIS (Collective Investment Scheme) Regulations.
The company had not obtained registration for its fund mobilising activity from the public under its Scheme of allotment of land, Sebi said in an order on Tuesday.
The individuals were the directors of the Yalsco and were responsible for the conduct of the company’s business during the period of mobilization of funds, it added.
Sebi also noted that in cases where any person raises funds through an unregistered CIS, it usually directs such person not to access the securities market for a particular period besides directing such person to make a refund to investors from whom funds were illegally mobilized.
However, in the instant case, the regulator said, the company’s properties and individuals have been attached vide an order dated March 5, 2016, of the Competent Authority under Chhattisgarh Protection of Depositors Interest (PID) Act.
Further, the process for refund to the investors under the unregistered CIS is being undertaken by the Competent Authority under the Chhattisgarh PID Act.
Therefore, any direction being passed shall not come in the way of repayment/refund of money by the Competent Authority.
Regarding the debarment of the noticees, Sebi noted that as the Scheme of the company being an unregistered ‘Collective Investment Scheme’, do not stand vitiated, the conduct of all the noticees calls for an appropriate direction, including debarment for the violation of the CIS Regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices Regulations) Regulations.
Accordingly, Sebi restrained them from accessing the securities market for four years or until the completion of proceedings under the Chhattisgarh PID Act, whichever is later.
Besides, Sebi directed them not to collect money from investors under its existing schemes.