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In a fresh crackdown on illegal fund—raising activities, market regulator SEBI on Wednesday barred Citrus Check Inns directors from raising fresh capital from the public, with immediate effect.
The Securities and Exchange Board of India (SEBI) found that Citrus has collected over Rs 777 crore from investors through its various holiday plans.
Also, it was running collective investment schemes (CIS) without obtaining registration from the regulator.
The order follows a complaint received by SEBI alleging that Citrus was running a ‘Ponzi Scheme’ and ‘mis—selling’ its schemes to the public.
It was also alleged that Citrus refused to refund the capital invested by the complainant in June 2012, when she approached the company for refund of the money. The company replied that she would “get the refund only after 4 to 5 years without interest.”
SEBI has received several investors’ complaints against Citrus alleging that directors of Royal Twinkle Star Club are now running their CIS through Citrus.
The regulator has already passed an order against Royal Twinkle and its directors, restraining them from collecting any more money from investors through existing or new schemes.
In an interim order passed today, SEBI said “...mobilisation of funds by Citrus under its various holiday plans with a promise of returns/holiday points...are nothing but a CIS.”
Accordingly, the markets regulator has ordered Citrus and its directors——Omprakash Basantlal Goenka, Prakash Ganpat Utekar, Venkatraman Natarajan and Narayan Shivram Kotnis——“not to collect any fresh money from investors under its existing schemes” and also asked them “not to launch any new schemes or plans or float any new companies to raise fresh money.”
Additionally, the company and its directors have been directed not to dispose any assets obtained from funds collected, while the entities also cannot divert money raised from the public.
Further, the entities have been asked to “immediately submit the full inventory of the assets including land obtained through money raised by Susk India” as well as furnish details related to the scheme within 15 days.
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