Comments
The Securities and Exchange Board of India (SEBI) has issued wind-up notice to MPS Greenery Developers Ltd for its collective investment schemes (CIS).
In an order (dated December 6, 2012), the market watchdog instructed the Bengal based company to refund investors the promised (“due”) returns within a month.
Till September this year, MPS mobilised deposits worth Rs 1,520 crore under various CIS schemes.
The wind-up order comes on the back of “continuous process of collection of funds by MPS in breach of the order of Calcutta High Court, terms of the provisional registration and the May 2012 order of SEBI.”
Business Line in its report ( Kolkata firm raises funds from public with ‘green’ bonds sans SEBI nod, January 9 ) had said that contrary to conditions imposed by SEBI, MPS mobilised funds under CIS schemes with a provisional registration. The provisional registration granted to the company expired on August 20, 2011.
Violated order
According to the market watchdog, MPS has violated its May 11 order which directed it to deposit the funds mobilised under such schemes with a nationalised bank in an interest bearing Escrow Account within 15 days from the issue of the order.
SEBI had given MPS an opportunity of personal hearing on December 5, 2012.
However, MPS neither presented itself nor filed any written submission. Rating agency ICRA Ltd downgraded MPS schemes saying they “have very high risks and extremely speculative” as on November this year.
Debt repayment
The rating revision takes into account the company’s substantial debt repayment obligations over the short-to-medium term, which is likely to result in significant cash flow mismatches.
Interestingly, in its December 6 order, SEBI took a dig at legal suits at various civil courts in West Bengal by “persons claiming to be the marketing agents or development executives of MPS”.
“These civil suits appear to be collusive in nature and were clearly aimed at circumventing the restrictions imposed by SEBI and seem to be tactics to collect money further from the innocent public,” the SEBI order noted.
SEBI has filed a Criminal Contempt Petition before the Calcutta High Court against the same, the order said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.