Sebi Blocks 3 CoS, 10 Securities Market Individuals For Illegal Fundraising Activities

NEW DELHI: Regulator Sebi on Friday banned three companies and ten people in the securities market from illegally raising funds from investors in the name of investments in teak trees.

Prime Plantations Pvt Ltd (PPPL), Adhunik Plantations Pvt Ltd (APPL) and Twentieth Century Plantation Pvt Ltd (TCPL) as well as ten individuals, including current and past directors of these companies, were banned.

The companies and four individuals were barred from the securities market for four years from the date of completion of investor redemptions, pursuant to a Sebi order.

In addition, companies were told to wind up their green chip program and return the money.

Six other people were given a two-year ban from the date of the order issued on Friday.

The watchdog examined the business activities of the companies for the period 1992 to 2019. It was found that the companies had launched identical programs, namely the “ Green Chip Scheme ”, under which investors had the possibility of investing Rs 7,500 and multiples thereof for a unit of five teak trees or multiples thereof, in PPPL and APPL.

While at TCPL, a minimum investment of 5,000 rupees and multiples thereof has been offered to investors.

Sebi said that it does not appear that these companies are actually closing a deal to sell teak while mobilizing investments from the respective investors.

The money was raised from investors by forcing them to subscribe to the programs and not by selling teak trees as they proposed, he added.

In addition, the regulator said the program was running without obtaining a registration from it.

According to said diagrams, Rs 11.57 lakh, Rs 12.06 lakh and Rs 3.42 lakh were mobilized respectively by PPPL, APPL and TCPL, in accordance with the order. This contravened the regulations on collective investment schemes (SIC).

Among other directions, current companies and directors have been urged not to divert funds raised from the general public.

According to another ordinance passed on Friday, Sebi blocked 23 entities from entering the securities market to engage in fraudulent trading activity in shares of Sunstar Realty Development Ltd. The ban is for a period ranging from six months to one year.

In another order, the watchdog imposed a market ban on six entities and one individual for a period ranging from six months to one year for engaging in fraudulent business practices in the certificate of