Securities and Exchange Board of India (SEBI) Tuesday directed
Saradha Realty India Ltd and its managing director Sudipta Sen to
wind up its existing collective investment schemes and refund the
money collected with returns which are due to the investors within
three months as it had contravened SEBI provisions by launching
such schemes without its permission.
"Since the noticee (Saradha Realty India Ltd) has launched
'collective investment schemes' without obtaining certificate of
registration from SEBI, it has contravened provisions of section
12(1B) of the SEBI Act and regulation 3 of the CIS Regulations,"
the order said, on a day Sen was arrested from Jammu and Kashmir.
Last week, the Saradha Group went bust and its offices downed
shutters, unable to repay the depositors - mainly poor people in
villages and small towns of West Bengal who had parked their hard
earned money with the company, lured by the promise of high
In an order, the SEBI directed that the company would have to
submit a winding up and repayment report in accordance with the
The capital market regulator said if the company failed to comply
with the order, prosecution proceedings would be initiated against
Saradha Realty and its directors.
It also said in such an eventuality, the matter would be referred
to the state government or the local police to register
civil/criminal cases against Saradha Realty India Ltd. and its
directors and its officials in charge of the schemes "for apparent
offences of fraud, cheating, criminal breach of trust and
misappropriation of public funds".
The SEBI order, signed by its wholetime member Rajeev Kumar
Agarwal, said the matter would also be refered to the ministry of
corporate affairs, to initiate the process of winding up of
Saradha Realty India Ltd.
The SEBI further directed Saradha Realty India Ltd and Sen not to
access the capital market and "restrain and prohibit" from buying,
selling or otherwise dealing in the securities market till all its
collective investment schemes were would up "and all the monies
mobilised through them are refunded to the investors".
The regulator had been inquiring into the operations and
activities of the company after it received a letter exactly three
years back from the Economic Offences Investigation Cell of West
Bengal, informing that the company was collecting contributions of
money from the public.