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The Securities and Exchange Board of India (SEBI) is cracking down on companies that illegally collected funds from the public. To recover over INR 100 crore in investor money, SEBI will be auctioning 30 properties belonging to seven such companies on May 15th.
The properties up for auction are linked to companies across various sectors, including agriculture (Mangalam Agro, which raised INR 11 crore illegally), solar power (NVD Solar, which raised INR 595 crore through unregistered equity share issuance), and infrastructure (Bishal Group, which collectively raised nearly INR 13 crore through unregulated activities by its various subsidiaries). A total of 30 properties will be auctioned, with a combined reserve price of nearly INR 25.64 crore. These properties include land parcels, buildings, and flats located primarily in West Bengal and Odisha.
SEBI estimates that investors lost over INR 100 crore due to illegal fundraising practices by these companies. They used various tactics to collect funds without following proper regulations, such as issuing unregistered securities (NCDs) and running collective investment schemes (CIS) without authorization. For instance, Sun Plant Business collected INR 4.17 crore through unauthorized means between 2005 and 2008.
This auction serves as a stark reminder for investors to be cautious when investing their money. It's crucial to research any company before investing and ensure they are compliant with SEBI regulations. Investors can check SEBI's website for a list of registered companies and investment schemes.
If you believe you've been a victim of illegal fundraising, you can file a complaint with SEBI. SEBI also advises potential bidders on these properties to conduct their independent enquiries for a minimum reserve price of INR 25.64 crore regarding any legal issues or encumbrances associated with the properties before submitting their bids.
This auction is part of SEBI's ongoing efforts to protect investors and ensure a fair and transparent securities market in India. By recovering funds from illegal activities, SEBI helps to deter future scams and safeguard investor confidence. This serves as a warning to companies that attempt to raise money illegally and a message of hope for investors seeking to recover their lost funds.
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