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The Securities and Exchange Board of India (SEBI) has unveiled its plan to recuperate investors' funds by conducting an auction of 11 properties belonging to Arise Bhoomi Developers and its directors. These properties, including land parcels, a retail unit, and a plot, are situated in the states of Uttar Pradesh and Maharashtra. SEBI has set a reserve price of over Rs 43 crore for the forthcoming auction.
Arise Bhoomi Developers raised a substantial amount of over Rs 8 crore from the general public during the 2013–14 fiscal year through investment schemes that lured participants with the promise of lucrative returns upon contract completion. Regrettably, these schemes fell under the category of collective investment schemes (CIS), necessitating mandatory registration with the regulatory authority. However, Arise Bhoomi Developers initiated these schemes without securing the requisite approvals from SEBI.
In an effort to facilitate the recovery process, SEBI has extended an invitation for bids to be submitted for the auction, scheduled to take place on July 14th. The properties owned by Arise Bhoomi Developers and its directors will be made available for sale via an online platform, with the auction period spanning from 11 a.m. to 1 p.m. The aggregate reserve price for the auction has been set at an impressive Rs 43.6 crore. SEBI has enlisted the services of Adroit Technical Services Ltd. to provide support in the sales process, utilizing the e-auction platform.
Previous attempts to recover investors' funds involved the attachment of certain properties and the issuance of directives for refund, inclusive of interest. Regrettably, these measures did not yield the desired outcome. Consequently, in October 2016, SEBI opted to attach the bank and DEMAT accounts of Arise Bhoomi Developers and its directors in order to recoup the outstanding dues.
SEBI had initially instructed Arise Bhoomi Developers and its directors in June 2016 to refund investors' money within a three-month timeframe, concurrently imposing a four-year prohibition on their participation in the securities market. However, the company failed to fulfil its obligations, prompting the subsequent attachment of their bank and DEMAT accounts.
In November 2018, SEBI imposed a fine totalling Rs 1 crore on Arise Bhoomi Developers and its directors for their involvement in the mobilization of funds from small investors through an unregistered collective investment scheme.
Through these measures, SEBI endeavours to effectuate the recovery of investors' funds and uphold compliance with regulatory prerequisites, fostering an environment of transparency and instilling confidence in the capital markets.
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