The regulator found that the company was engaged in mobilising fund from the public by floating such 'collective investment schemes' without obtaining registration from Sebi as required under the norms.
He noted that Sebi's move is a pro-active one to regularise leverage, reduce systemic risk, and avoid a potential settlement crisis.
Markets regulator Sebi has imposed a penalty totalling Rs 1.5 crore on Samruddha Jeevan Foods India Limited and three others for mobilising funds from investors through unregistered collective investment schemes.
The company offered various schemes under which money was collected from the public in order to carry out the ‘business’ of “purchase and rearing of goats/ buffaloes”.
The regulator found that the company was engaged in mobilising fund from the public by floating such ‘collective investment schemes’ without obtaining registration from Sebi as required under the norms.
The total outstanding or remaining customers till October 2017, was over 11.97 lakh and amount payable to such investors was over Rs 122 crore, the Securities and Exchange Board of India (Sebi) said in an order on Thursday.
Sebi, through an interim order in October 2013, had directed the company and its directors not to collect money from investors under the existing schemes and not to divert any funds raised from the public at large.
However, on perusal of bank account statements of the the company, it has been observed that the firm was not only mobilizing money from the investors but also diverting monies from its bank accounts when Sebi’s directions were in force, the regulator noted.
“The conduct of noticee (the company and three individuals) amounts to gross misconduct and flippant approach towards regulatory requirements and directions,” Sebi said.
By indulging in such activities, they have violated the provisions of CIS Act and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
Accordingly, the regulator has imposed a penalty of Rs 1.5 crore on Samruddha Jeevan Foods India, Mahesh Kisan Motewar, Vaishali Mahesh Motewar, and Rajendra Pandurang Bhandare.