FORTUNA AGRO PLANTATIONS IMITED Vs. STATE
SECURITIES APPELLATE TRIBUNAL
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(1.) M/s Fortuna Agro Plantations Ltd, Kolkata (hereinafter referred to as the company) mobilised funds amounting to Rs 6.20 crores from the investors/public under the collective investment schemes being operated by it.
(2.) Pursuant to the notification of the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as the Regulations) on 15.10.1999, the company filed an application with SEBI (hereinafter referred to as SEBI) for the grant of provisional registration. As the details submitted by the company were found to be unsatisfactory, certain information/clarifications were sought from the company and several reminders were also issued by SEBI, in order to process the said application. Despite the same and even after granting the company personal hearings before the then Chairman, SEBI and before me, the company did not submit the required documents within the stipulated time, i.e. by July 15, 2002, and also failed to submit the clarifications as sought by SEBI. Since the company failed to satisfy SEBI that its affairs were not being conducted in a manner detrimental to the interests of the existing investors, the application of the company seeking grant of provisional registration was rejected by SEBI on July 24, 2002, and communicated to the company vide letter dated July 25, 2002. The company was further informed that pursuant to the rejection of the said application, the company, as an existing Collective Investment Scheme, should wind up its existing scheme(s) and make repayment to the investors in the manner specified in Regulation 73 of the said Regulations.
Accordingly, the company was required to send an Information Memorandum to the investors, who had subscribed to its scheme(s), within two months from the date of receipt of intimation from SEBI. Furthermore, upon the completion of the winding up of the schemes of the company and repayment to the investors in the manner specified in Regulation 73 of the Regulations, the company was required to file a "Winding up and Repayment Report" in the format prescribed by SEBI which was to reach SEBI within three and half months from the date of Information Memorandum, i.e., by January 9, 2003 However as the company failed to submit the required report before SEBI in terms of the provisions of Regulation 73 of the said Regulations within the stipulated date and also failed to comply with the directions conveyed to them vide SEBI's letter dated July 25, 2002, i.e. to wind up its existing scheme(s) and make repayment to the investors in the manner specified in Regulation 73 of the said Regulations, in exercise of the powers conferred upon me under Section 11B read with Section 4(3) of the SEBI Act, 1992 and Regulation 65 of the said Regulations, by an order dated April 02, 2003, I directed the company to refund the money collected under the scheme(s) with returns which is due to the investors as per the terms of the offer within a period of one month from the date of the order, failing which actions as specified in the order would follow, which inter alia included a direction to the company / its promoters / directors / managers / persons in charge of the business of their schemes from being debarred from operating in the capital market for a period of 5 years.
(3.) THE period of one month granted to the company expired on May 2, 2003. I have also noted that the order dated April 2, 2003, was forwarded to the company at its registered office address under cover of letter dated April 9, 2003 and the copies thereof have been sent to the Managing Director and all other Directors of the company. However the company has till date not refunded the money to its investors. Instead the company has sent a letter dated May 14, 2003, to SEBI wherein it has been stated that the company had issued the information memorandum to all the investors in terms of regulation 73 of the said regulations and that the response received from the investors is as under :-
1. 43.76% of the investors wanted to continue with the scheme
2. 40.38 % of the investors wanted to convert their investment in the equity of the company.
3. 16.55% of the investors could not respond. (As per the information memorandum, the Bond holders who did not respond, would continue with the scheme without any further risk and responsibility of SEBI).;
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