After an over seven-year probe into alleged money-pooling through 'art funds', Sebi today let off Bajaj Capital and two other entities as they were not found to be running illicit 'collective investment schemes'.
Bajaj Capital was found to be only into an advisory business with regard to art as an investment option, while it did not launch any 'art fund' to actually collect money from investors, Sebi said in an order.
At least two other entities, Marwah Fine Art Dealers and RR Investors Capital Services, were also let off by Sebi after the regulator's probe concluded that they were not running any art fund schemes in contravention of the CIS (Collective Investment Schemes) regulations, the regulator said in separate orders passed today.
Sebi had begun probe into various cases of art funds being sold as investment schemes way back in 2006-07. At that time only, Sebi had issued notices to Bajaj Capital, part of a leading business conglomerate, as also to Marwah and RR Investors among others.
Some other entities are still being probed for allegedly running illicit investment schemes in name of art funds.
So far, only one major entity, Osian's Art Fund, has been found guilty by Sebi of violating its norms with regard to collection of money from investors through art fund schemes. Soon after Sebi passed an order against Osian's in April 2013, the entity approached the Securities Appellate Tribunal (SAT) against the regulator's direction to refund over Rs 100 crore and stop running any such schemes.
The case is still being heard by SAT.
Way back in February 2008, Sebi had also issued a public notice warning investors against "investments in Art Funds, funds/schemes launched by companies or any entity formed for the purpose" and had said that such activities were in nature of 'collective investment schemes' and need its approval.
Among the three cases disposed by Sebi today, Marwah group had sought Sebi's guidance in January 2007 to set up an art fund, after the regulator had issued a show-cause notice to them.
The regulator had prima facie observed that the entity was carrying out activities in the nature of a collective investment scheme without registering for the same. Similar prima facie observations were made by Sebi with regard to Bajaj Capital and RR Investors as well.
After detailed probe into these cases, Sebi however concluded later that neither did they launch any art funds, nor they collected money from investors for such schemes.