Capital market watchdog Sebi has filed for prosecution of 553 firms for running unauthorised collective investment schemes and action has also been initiated against many other entities, including Rose Valley and Alchemist groups.
The Securities and Exchange Board of India (Sebi) has filed for prosecution of 553 companies during 2000-2012, Minister of State for Finance Namo Narain Meena informed the Rajya Sabha.
In a written reply, he said action has been taken against them for “non-compliance of Sebi order for carrying out unauthorised/unregistered collective investment schemes”.
The companies against whom prosecution actions have been filed during the 2000-2010 period include AFL Agrotech, Accord Plantation, Four Season Farms, Gangotri Green Valley, Golden Projects, Canon Orchards, Ridah Farms, DMC International and Tofha Farmings.
Besides, Sebi has issued directions against 22 companies, including KBCL India Ltd, Ken Infratech Ltd, Osian’s Connoissurers of Art Ltd and Sunplant Agro Ltd, for carrying out unauthorised collective investment schemes.
According to the Minister, action has been initiated against Alchemist, Prayag and Rose Valley entities.
Sebi received a complaint against Alchemist Capital Ltd alleging that the company has raised Rs. 165 crore from 28,000 investors by way of issuance of redeemable preference shares in 2006. The matter is being examined by the market regulator, he said.
Action has been taken against Alchemist Infra Realty Ltd, Alchemist Holdings Ltd, Rose Valley Real Estates & Construction Ltd, Rose Valley Hotels & Entertainment Ltd and Prayag Infotech Hi-Rise Ltd.
Collective investment schemes come under the regulatory ambit of Sebi.
In recent times, there have been many instances of people getting duped by fraudulent money pooling schemes and the government is taking various measures to curb the menace.