Refund Rs 1,520 cr to investors: Sebi to Bengal plantation firm

Dec 08 2012, 01:11 IST
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SummaryMPS Greenery planned to raise R30,000 cr through its CIS schemes

Cracking down on illegal fund-raising by plantation companies, the Securities and Exchange Board of India has directed Kolkata-based MPS Greenery Developers Ltd to close its Collective Investment Schemes and refund Rs 1,520 crore to investors in a month, failing which proceedings would be initiated against it and its senior officials. MPS had originally targeted to mobilise Rs 30,000 crore from the public.

MPS has collected approximately Rs 1,520 crore, in the absence of any valid registration and moreover, ignoring the specific prohibition issued by Sebi vide its second order not to raise any money in any new or existing schemes, Sebi said in its order.

Sebi said if MPS fails to comply with its directions, prosecution proceedings against the company and its promoters, directors and managers would be initiated. These persons include Pramatha Nath Manna, Santanu Chowdhury, Arup Kumar Roy Gupta, Subrata Basu, Prabir Kumar Chanda, Madhusudhan Adhikari and Sukumar Ghosal. They would also be restrained from accessing the capital market till all the monies are refunded, it said.

According to the Sebi, MPS had issued an advertorial on March 30, 2012 in a business daily stating that the Calcutta High Court has permitted it to continue with its business. The said advertorial also announced that MPS was allowed to raise money from the public and made disclosure about its intention to raise 80 per cent of its targeted total amount of Rs 30,000 crore through its CIS schemes. This advertisement by MPS further flouts the conditions of the Provisional Registration dated August 21, 2009, granted by Sebi and the order of High Court dated June 25, 2009 as well, Sebi said.

In addition, reference would be made to the police to register a case against MPS and its officials and a reference would be made to the Corporate Affairs Ministry to initiate the process of winding up of the companys business.

Sebi had granted a Provisional Registration to the entity directing MPS not to launch any new scheme or raise money from the investors even under the existing scheme, till a certificate of registration is granted by Sebi. However, MPS failed to comply with certain important conditions laid down on the registration granted to it in 2009.

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