Sebi prohibits MPS Greenery from disposing of assets
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Sebi prohibits MPS Greenery from disposing of assets

Last Updated: Friday, June 06, 2014, 20:15
 
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Sebi prohibits MPS Greenery from disposing of assets
Mumbai: Sebi on Friday barred West Bengal-based MPS Greenery Developers, booked for running illegal investment schemes, from disposing of any of its assets, except some bank accounts, to ensure the firm does not evade from refunding over Rs 1,700 crore to affected investors.

Besides, the company has been directed to furnish to the Securities and Exchange Board of India (Sebi) the complete details of all the movable and immovable properties held by it within a week.

The market watchdog had initiated recovery proceedings against MPS Greenery after it failed to repay the money it had raised from investors together with returns. It also failed to wind up its illegal Collective Investment Schemes (CIS).

Consequently, Sebi last year had ordered attachment of bank accounts of MPS Greenery that was stayed by the Calcutta High Court. The regulator had also ordered attachment of shares held by the promoters of MPS Greenery's group firms.

While the recovery proceedings were in progress, the firm informed Sebi on May 19 that it had resolved to surrender/wind up the existing collective investment schemes and surrender the assets from these schemes to Sebi, for liquidating the assets and making repayment to the investors.

"...The letter dated May 19, 2014, sent by the defaulter appears to be an attempt to evade responsibility of repaying to the investors and winding up the schemes worth more than Rs 1,700 crore as per the order dated December 6, 2012," Sebi said in an order on Friday.

"While, the said letter is under consideration of Sebi, there is an apprehension that the defaulter may dispose or transfer or alienate the assets with a view to obstruct or delay the recovery proceedings or thwart the directions of Sebi, which needs to be prevented immediately in the interest of investors," it added.

Accordingly, Sebi has prohibited, till further orders, MPS Greenery "from disposing, transferring, alienating, or charging in" all the immovable properties and all other movable properties "except the bank accounts as permitted by high court of Calcutta vide order dated December 19, 2013".

The market watchdog observed that not only did the company failed to refund the investors "but also through its proxies/agents filed various civil suits across the state of West Bengal and obtained stay order, which were later on vacated at the instance of Sebi".

In this connection, Sebi also noted that the High Court of Calcutta while rejecting a suit filed by an employee/agent of MPS Greenery had observed that the firm "had been illegally continuing its collective investment schemes against public interest and to the detriment of the depositors".

"Inspite of dismissal of many civil suits, the defaulter failed to take any steps to repay to the investors either in part or in full, hence the recovery proceedings were initiated against the defaulter," Sebi said.



PTI

First Published: Friday, June 06, 2014, 20:15


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