Mumbai: To safeguard investors from illegal money-pooling scheme by JSV Developer India, Sebi has barred the Madhya Pradesh-based company and its directors from raising funds from public and not to float any new plans.
The Securities and Exchange Board of India (Sebi) found that JSV Developer was collecting money from public through its various schemes of "Joint Venture Association" for the development and maintenance of land.
This plan was found to be allegedly in the nature of unauthorised 'Collective Investment Scheme (CIS)', Sebi said in an order dated July 31.
Noting that steps had to be taken to ensure that no investors is defrauded through fraudulent schemes, Sebi has directed JSV Developer and its three directors "not to collect any fresh money from investors from its existing scheme" and "not to launch any new association/scheme/plan or float any new companies to raise fresh moneys".
The company and its directors have also been asked not to dispose of any of the properties or alienate the assets of the existing scheme as well as not to divert the funds raised from public.
The orders have come into force with immediate effect and will apply until a final decision is taken in the matter.
Besides, the entities have been ordered to "immediately submit" the full inventory of the assets owned by JSV out of the amounts collected from the schemes and furnish all the information sought by Sebi including scheme wise list of investors, details of amount mobilised and refunded till date.
The market regulator had begun a probe into the matter after receiving a copy of order by Madhya Pradesh High Court from the Ministry of Finance, in 2012.
It was observed, among others, that the petitioners therein had filed a Public Interest Litigation seeking order of enquiry against various financial companies, including JSV Developer.
The petitioners had pleaded that thousands of persons of across Madhya Pradesh had been cheated by various finance companies under the garb of various schemes, which used to collect deposits from public with a promise to pay the money back with higher return of interest from 15-20 percent.
Sebi said that "the activity of fund mobilisation by JSV Developer with a resultant promise of returns clearly falls within the ambit of 'collective investment schemes' as defined in... The Sebi Act".
