Sebi restrains NICL from raising funds

Mumbai: Cracking down on illicit realty investment activity, Sebi barred Madhya Pradesh-based NICL India Ltd from raising funds from the public and launching new schemes with immediate effect. Based on a preliminary probe, Securities and Exchange Board of India found that NICL was running a 'collective investment schemes (CIS)' related to purchase and development of land, without getting requisite certification.

According to Sebi findings, the company had raised nearly Rs 7 crore from thousands of investors. In an order today, Sebi said that to safeguard investors interest and till the time final decision is taken in the case, it was "necessary" for the regulator "to take urgent preventive action by way of an interim measure". The regulator has asked the company and its directors -- Phool Singh Choudhary, Harish Sharma and Abhishek Chauhan "not to collect any fresh money from investors under its existing schemes" and "not to launch any new schemes or plans or float any new companies to raise fresh moneys".

Additionally, the company and its directors have been directed not to dispose of any assets obtained from the funds collected, while the entities also cannot divert money raised from the public.

Further, the entities have been asked to "immediately submit the full inventory of the assets" obtained through money raised by NICL. It would also have to furnish, among others, details about the investors and amount mobilised and refunded.

Sebi had come across a news report in July 2013 in respect of fund mobilisation from general public by NICL. The news report also stated that another group company of NICL was issuing debentures to investors. It was alleged that this group companies were offering high commission to their agents.