The scheme being finalised by Sebi will be submitted before the High Court on Tuesday. Sebi has filed several cases against plantation companies most of which are being heard by the bench comprising Chief Justice M B Shah.

At a recent hearing, the bench said it is imperative that investors get their monies back as the cases being tried by the court might take time. The court has, in most cases, already frozen the assets and accounts of the plantation companies till the pendency of the cases.

The court has now asked Sebi to prepare a scheme which will outline the broad framework to be followed for refunding investordues. Sources say the market regulator may recommend that the assets of the plantation companies be sold to repay investors. The details of the scheme are currently being worked out. If the high court approves of the scheme, it would be a dream come true for hundreds of hapless investors who have sunk lakhs of rupees in various collective investment schemes. A number of plantation companies, which raised enormous funds thanks to the astronomical returns offered to investors, have defaulted in repayments leaving the investors in a lurch.

With no regulations for enforcing these plantation companies, Sebi acted on complaints by investors, by filing public interest litigations in at least five case, in the Mumbai High Court. In some cases, the market watchdog was dragged to court by a few plantation companies who challenged Sebi's legal jurisdiction in regulating these entities.

Sebi has already approached the Department of Company Affairs (DCA) for its assistance in tracking down the 4,000-odd companies whohave raised money from investors. A Sebi audit of 50 such companies has revealed that these companies have been raising money in the form pure deposits (which do not come under Sebi's purview) apart from issuing securities in the form of agro-bonds. The finance ministry has also submitted before the Delhi High Court that the government is considering coming out with an ordinance to empower the regulator to seize the assets of plantation companies as well as appoint its nominees on the board of directors of these firms.

Meanwhile, Sebi is continuing with its efforts to caution investors against attractive promises by plantation companies. Rating had been made mandatory for plantation companies before raising funds, but so far all plantation companies have been rated below investment grade, which implies a high risk perception for investors contemplating investment in such schemes.

Sebi has also asked investors to verify the credentials of persons floating such schemes; to check if the projects of theseschemes have been appraised by a credible agency, to understand the implications of the ratings and to take all precautions before making any investments in these schemes. Sebi has also appealed to members of the public to forward to it the name and address of any company which is mobilising funds or inviting subscription without obtaining a rating.