Pulling the plug on an unauthorised investment scheme run by KBCL India in garb of realty business, market regulator Sebi today barred the firm and its directors from raising any money from public.
Based on its preliminary findings into real estate scheme by KBCL (earlier known as Kalpataru Biotech Corporation), Securities and Exchange Board of India (Sebi) found that the company was running a 'collective investment scheme' (CIS) without requisite approvals and registration with the market regulator.
"...I find no other alternative but to take recourse through an interim measure against KBCL for preventing it from further carrying on with its fund mobilising activity by launching 'collective investment scheme' without registration from Sebi in accordance with law," Sebi whole-time member S Raman said.
Accordingly, Sebi has directed KBCL India Ltd and its Directors -- Rakesh Kumar, Vishvnath Pratap Singh and Shashi Kant Mishra, -- not to collect any more money from investors, including under the existing schemes.
Besides, it has asked the entities not to launch any new schemes, not to dispose of any of the properties or alienate any of the assets of the schemes and not to divert any funds raised from public at large which are kept in bank account(s) and/or in the custody of KBCL.
Further, the regulator has asked the entities to file their replies in this regard within a period of 15 days.
Sebi had received several complaints, alleging illegal mobilisation of funds through activities in the nature of CIS by KBCL.
The regulator said KBCL had launched a scheme for the purchase and development of plot/land inviting investment from the public.
Based on material available on record, Sebi observed that the scheme by KBCL "does not show any resemblance to real estate business or transaction but rather operates as a disguise to mislead and attract investment from the general public towards the fund mobilising activity of KBCL".
The regulator noted that the scheme fulfilled essential conditions and characteristics of CIS.
Moreover Sebi said that KBCL "has not obtained any certificate of registration under the CIS Regulations for its fund mobilising activity from the public, under the instant 'Scheme' offered by it".