Mumbai: The Securities Appellate Tribunal on Tuesday gave 18 month's time to Alchemist Infra Realty Ltd for complying with Sebi orders that had asked the company to refund an estimated Rs 1,000 crore collected from public through unauthorised 'collective investment schemes' (CIS).
The company had collected about Rs 1,000 crore from about 1.5 million investors.
Alchemist Infra Realty was found by the Securities and Exchange Board of India (Sebi) to be running unauthorised CIS businesses and was asked by the regulator to refund the money collected through such schemes.
After hearing its appeals against Sebi orders, SAT today passed an order upholding the regulatory directions against the realty firm, but gave the company 18 months time to refund money in view of the "long and tedious process of implementing the scheme of repayment" to such large number of investors.
However, the company had sought five years for refund process.
After considering facts and circumstances of the case, the Tribunal said, "a period of 18 months would duly suffice", with a rider that the company shall "submit a report to Sebi every six months giving accurate details regarding progress made while executing the scheme of repayment in question".
Besides, the Tribunal said in case any eventuality arises in future, the company can seek further extension of time to implement Sebi's order.
With regard to another appeal against Sebi's decision to reject a consent plea by Alchemist Infra Realty, SAT observed that the regulator should have given the company more time.
"Sebi should not have returned the request" of the company for a consent."
The Securities and Exchange Board of India (Sebi), last month, had asked Alchemist Infra Realty to wind up all such activities and refund the money collected from public investor within three months.
Besides, the company and its five directors have also been barred from the securities market till the time all its schemes are wound up and the money is refunded to investors.
Sebi probe also found that the investment application forms of the company also mentioned that it was part of 'Alchemist Group', which was engaged in diverse activities such as steel, food and beverages, IT, healthcare, media, aviation, realty, hospitality, education and tea estate, among others, with asset base of over Rs 5,000 crore.
The regulator began its investigations into the affairs of the company in 2011 after receipt of an anonymous complaint about the company mobilising money from the public investors in breach of regulations.
Sebi later found that the company was running CIS in the name of real estate business and had garnered Rs 1,087 crore as on March 31, 2011.
The company was charging up to 75 percent as 'development charges' from the money collected from investors towards purchase of land.
During the initial probe, the company refused to provide details sought by Sebi, saying the regulator did not have a jurisdiction and it was not running any CIS business.
Alchemist Infra Realty later provided some details to Sebi after repeated reminders and Sebi issued show-cause notices to the company and its directors in 2012.
Sebi, however, found that Alchemist was seeking investments of a minimum amount of Rs 1,000 and in multiples of Rs 1,000 thereafter, wherein investors were allotted immovable property that could be leased out to the company under 'fixed term tenancy agreement'.