Markets regulator Sebi today directed Gwalior-based KMJ Land Developers India and its directors to refund within a month the money collected from investors illegally.
In an interim order passed in 2014, the regulator had restrained the firm and its directors from raising funds from investors after finding that money pooling activity by the company was in the nature of “collective investment scheme (CIS)” and was being run without requisite approval from the regulator.
The Securities and Exchange Board of India (Sebi) had concluded in its interim order that the fund mobilising activity of KMJ Land Developers India under the garb of a real estate business for the sale/purchase, development and maintenance of agricultural land fell within the parameters of a CIS.
“I have perused the contents of the interim order and do not find any reason to differ with the prima facie conclusion arrived at in the interim order,” Sebi Whole Time Member (WTM) G Mahalingam said in an order today.
Mahalingam noted that in the absence of any evidence provided to refute the findings in the interim order, the activities of the firm and its directors constitute a CIS and has been carried out without seeking a registration from Sebi, thereby contravening the CIS Regulations.
The directors are Santoshi Lal Rathore, Rajawat Kushwah, Nirmala Rathore, Gopal Prasad Gupta, Dilip Jain, Sunil Singh, Mathura Bai and Sunil Singh Kushwah.
KMJ Land Developers India and its directors “are jointly and severally liable to wind up its existing collective investment schemes and refund the money collected by it under the schemes with returns which are due to the investors” within a period of one month, the order said.
Besides, the firm and its directors have been restrained from holding position as directors or key managerial personnel of any listed company for a period of four years.
The firm and its directors have also been ordered not to alienate or dispose of or sell any of the assets of the company except for the purpose of making refunds to its investors.