In a major crackdown, regulator Sebi today slapped Rs 26 crore penalty on Rose Valley Real Estate Construction and its directors for mobilising funds from investors through illegal money pooling schemes.
The company raised funds from the public in certain areas of West Bengal in the name of selling plots under its ‘Ashirbad’ scheme.
Earlier also, the regulator had cracked down on other Rose Valley Group firms for collecting thousands of crore of rupees through illicit money-pooling schemes. Sebi and several other agencies, including ED, have also passed attachment orders of the group’s assets in various cases.
In the latest order, SEBI said Rose Valley Real Estate had raised Rs 1,358 crore as on March 2010 under the Ashirbad scheme. Thereafter, the funds collected under the scheme had increased to Rs 2,016 crore as on March 2011, reduced to Rs 1,538 crore as on March 2012 and further dropped to over Rs 742 crore till March 2013.
“The company has launched the scheme — Ashirbad — which is a CIS and has been mobilising funds through the scheme since 2003 but has not obtained a certificate of registration from Sebi for the same. I am, therefore, of the opinion that the noticees have contravened the provisions of… the SEBI Act,” SEBI Adjudicating Officer Soma Majumder said.
Noting that mobilising funds through an unregistered CIS is certainly a serious violation affecting the interest of gullible investors at large, Sebi said it warrants the maximum possible penalty.
Accordingly, the regulator has imposed a penalty of Rs 26 crore on Rose Valley Real Estates and its directors — Gautam Kundu, Shibamoy Dutta, Abir Kundu and Ashok Kumar Saha — Ram Lal Goswami (former director).
The penalty should be paid “jointly and severally”, it added.
In June 2014, Securities and Exchange Board of India (Sebi) had asked the West Bengal-based firm to wind up its collective investment schemes (CIS), issued through its real estate and construction unit, and repay money to investors within three months.