Sebi asks a firm to refund investors' money in CIS case

NEW DELHI: Clamping down on unauthorised collective investment schemes (CIS), Sebi has ordered Garima Real Estate and Allied Ltd to refund the money raised from such schemes to the investors within three months.

Besides, the firm and its directors have also been barred from the capital markets for four years.

It was alleged that the company had launched and operated CIS without obtaining registration.

A Securities and Exchange Board of India (Sebi) probe found that the firm started pooling funds from investors soon after its incorporation in 2007, under 'Advance for plot booking' and various land schemes mobilising Rs 55.22 crore from more than 1 lakh investors.

Even though the firm claimed to have repaid an amount of over Rs 45 crore, Sebi said the company "has not proved the veracity of such claim of refunds with documents".

The company and its directors are "restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of 4 years".

In case the firm fails to comply with these orders, Sebi would register a case with the state government or police against them for fraud, cheating and misappropriation of public funds.

Besides, Ministry of Corporate Affairs would initiate the process of winding up of the company.

The directions take effect immediately.