Continuing with its action against unauthorised investment schemes, Sebi has asked Orient Resorts to wind up operations and refund money which it had collected from public promising 100 times return by investing in teak tree saplings.
The Securities and Exchange Board of India (Sebi) had received a complaint alleging that Orient Resorts had raised an amount of more than Rs 10 crore from the over 50,000 investors through collective investment schemes (CIS) without obtaining requisite registration from the market regulator.
In an order dated November 26, the market regulator has asked Orient Resorts to wind up all such activities and refund the money collected from public investors within three months.
Besides the company, Darshanbhai Arvindbhai Shah (former Managing Director) and two directors Brahm Dev Amarnath Shukla and Dilpesh V Shah have also been barred from dealing in the securities market for a period of three years.
Sebi, prima facie observed, that Orient Resorts had launched a scheme--Vanashree Teak Bumper Profits Scheme—in 1993. It called for an investment of Rs 910 per unit for a period of 18 years from the investors and claimed that the investors would receive Rs 91,000 for every Rs 910 invested for one unit.
The money collected was pooled towards setting up of a teak plantation.
"I find that the Orient has illegally continued the scheme in contravention of the provisions of the Sebi Act and the CIS Regulations," Sebi Whole Time Member Rajeev Kumar Agarwal said.
Accordingly, Sebi directed "Orient Resorts and its directors Brahm Dev Amarnath Shukla and Dilpesh V Shah to wind up its scheme and to repay the income or returns to the investors or transfer the produce ie one teak tree per unit to them, as represented under the scheme, within a period of three months from the date of this order."
"Orient Resorts, Shah and Shukla are directed not to access the securities market and are further restrained and prohibited from buying, selling or otherwise dealing in the securities for a period of three years," Sebi said.