Mumbai: Capital market regulator Sebi has directed immediate winding up of unauthorised dairy investment scheme run by G N Dairies and has asked the company to refund investors' money within three months.
Besides, G N Dairies and its three directors have also been barred by Sebi from accessing the securities market till the time all collective investment schemes launched by the firm are wound up and the money refunded to the investors.
Securities and Exchange Board of India (Sebi) found that G N Dairies was seeking funds from public on promise of high returns in the name of trading of cattle and ghee, without obtaining requisite certificate from the market regulator.
"It is undisputed fact that G N Dairies was circulating the proposal/application form cum agreement, inviting general public to subscribe to the scheme by offering lucrative returns," Sebi said in an order dated October 31.
Consequently, the regulator has ordered G N Dairies and its promoters and directors "to wind up its scheme and refund the money collected by it under the scheme with returns which are due to the investors as per the terms of offer within a period of three months from the date of this order."
Further, the firm would have to submit a winding up and repayment report to Sebi, including trail of funds claimed to be refunded and bank account statements indicating refund to the investors.
According to Sebi, if the company fails to comply with its directives, a reference would be made to the state government and local police to register a civil/criminal case against them for fraud and cheating.
Moreover, a reference would also be made to the Ministry of Corporate Affairs, to initiate the process of winding up of G N Dairies Ltd, while the market regulator would also begin attachment and recovery proceedings against the company.
Barring G N Dairies and its present directors -- Sunil Dutt, Hardeep Singh Wahla and Ranjodh Singh -- from the stock markets till all schemes are closed and money refunded, Sebi has also prohibited the company's former directors -- Sukhjit Kaur, Soly Thomas and Satnam Singh Randhawa -- from dealing in securities for a period of one year.
The regulator said its "directions shall come into force with immediate effect".
Sebi observed that the contribution made in the form of payment for cattle/calf/ghee by the investors was managed by G N Dairies on behalf of the investors.
Among others, Sebi noted that G N Dairies had absolute discretion for sale of produce from rearing of cattle/calf and investors did not have any day-to-day control over the scheme.
Further, the watchdog found that the investment made by investors ranged from Rs 1 lakh to Rs 2 lakh.
In its submission, G N Dairies claimed it had returned calves and ghee to as many as 45,000 investors.
