Comments
The Securities and Exchange Board of India has asked Rose Valley to wind up its collective investment schemes, issued through its real estate and construction arm, and repay investors within three months.
The order passed on June 18, comes into immediate effect.
The 21-page order, issued against Rose Valley Real Estate and Construction Ltd (RVRECL), reads: “….Rose Valley Real Estates and Constructions Ltd. and its promoters/directors …. to wind up its scheme and refund the money collected by it under the scheme …. within a period of three months from the date of this order and submit a winding up and repayment report to SEBI …..”
Apart from these, Rose Valley needs to submit the “trail of funds” claimed to be refunded, “bank account statements indicating refund” to investors and “receipt from the investors acknowledging such refund.”
According to the SEBI order, the money collected by RVRECL through a scheme “called Ashirbad” has increased from Rs 1,358 crore to Rs 2,016.32 crore during April 1, 2010 to March 31, 2011.
The scheme, SEBI points out, falls within the purview of the “collective investment scheme” definition of the market regulator.
Rose Valley had claimed that the collective investment scheme was discontinued in 2010.
Legal Recourse
Failure to comply with the order or non-payment of investors’ funds would result in registering of criminal and civil cases against the company and its promoters / directors.
Further it mentioned that failure to repay will also lead to making a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of Rose Valley Real Estates and Construction Ltd; including initiating the attachment and recovery proceedings under section 28A of the SEBI Act; apart from legal recourse
SEBI has also restricted Rose Valley’s access to the money market and has prohibited it from “buying, selling or otherwise dealing in the securities market” till all collective investment schemes launched by Rose Valley Real Estates and Constructions Ltd comply with the SEBI order and replay its investors.
Rose Valley’s response
A Rose Valley spokesperson has however claimed that it will move to SAT (Special AppellateTribunal) against the SEBI order. It would also question the figure of Rs 2,000 crore of deposits that the market regulator claims it to have raised.
“Repayments are made every day and at present the company is yet to pay Rs 175 crore of an earlier mentioned amount of Rs 1,274 crore. The repayment would be made over the next three months in accordance with the SEBI order,” he said adding that there hasn’t been a single investor complaint against the company on non-repayment of dues.
However, SEBI in its order has mentioned that Rose Valley has “till date” not provided “any documentary evidence to substantiate its claim that it has refunded the money to the investors.”
“….RVRECL has merely claimed that it has already paid these customers, however no evidence has been adduced. Further, it is pertinent to mention that even till date we are receiving complaints from various investors/agencies stating that RVRECL has failed to pay the maturity amount due,” the market regulator has maintained in the order.
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.