Responding to queries received by it from investors on the financial health of individual plantation companies, SEBI said the regulator had only limited information about the schemes floated by such companies and was not in a position to give any advice on their financial health. However, audit of many of those entities had revealed an unsatisfactory state of financial health, the regulator pointed out.

SEBI informed that no plantation company had received any registration from it so far as the regulations for these companies were yet to be notified. Stating that rating had been made mandatory for plantation companies before raising funds, SEBI said all plantation companies rated so far had been found to be below investment grade, which implied that there was a veryhigh risk perception for investors contemplating investment in such schemes.

SEBI advised that investors should not be mislead by advertisements promising high returns, incentives and tax benefits. The regulator said whenever advertisements were not in conformity with the prescribed advertisement code, it initiates action against the entities issuing such advertisements.

SEBI has also asked investors to verify the credentials of persons floating such schemes, check if the projects of these schemes have been appraised by a credible agency, understand the implications of the ratings and take all precautions before making any investments in these schemes.

SEBI has also appealed to members of the public to forward to it name and address of any company which is mobilising funds or inviting subscription without obtaining a rating.