SEBI Slaps Rs15 Lakh Fine on Alchemist Infra Realty's Former Director Balvir Singh for Running CIS Illegally
Moneylife Digital Team 30 May 2023
Markets regulator Securities and Exchange Board of India (SEBI) slapped a fine of Rs15 lakh on Alchemist Infra Realty Ltd's former director Balvir Singh for illegally mobilising funds from the public through a collective investment scheme (CIS). Mr Singh has already been restricted from markets by the regulator.  
In an order, Soma Majumder, adjudicating officer (AO) of SEBI, says, "I note from the balance sheet of Alchemist that it had mobilised funds to the tune of Rs 54.1 crore as of 31 March 2009. The balance sheet figures on records establish with certainty that Alchemist was carrying out CIS activities at least in the financial years (FYs) 08-09 while the company was incorporated in 2008 and Mr Singh, in the capacity of a director, was responsible for the conduct of the company, which was carrying out such CIS activities without necessary registration."
"However, I note that Mr Singh has already been restrained from accessing the securities market till all the CIS is wound up by Alchemist and all the monies mobilised through such schemes are refunded to its investor with returns which were due to them. Further, I note that Mr Singh was a director of the company for a limited period, i.e., from 8 April 2008 to 9 February 2009, when the fund mobilisation was Rs54.1 crore in that financial year, whereas the total fund mobilisation by Alchemist in FY09-10 was Rs449.1 crore and Rs1,087.68 crores for FY10-11. Therefore, he cannot be held liable for the acts of the company subsequent to his cessation as a director of the company," the AO says.
In February 2021, the market regulator had slapped a penalty of Rs1 crore on Alchemist and its directors, including Mr Singh, for engaging in fund mobilising activity from the public by floating and launching CIS with obtaining registration from SEBI.
However, the securities appellate tribunal (SAT) set aside the adjudication order against Mr Singh and restored the matter for passing fresh order on merits and in accordance with the law.
Almost nine years ago, Sachin Pilot, the then minister of corporate affairs, had informed the Parliament that the serious fraud investigation office (SFIO) was probing 67 companies for running Ponzi or money circulation schemes. As per the list provided at that time by the minister, complaints of financial fraud have been received against Saradha group's 10 entities such as Saradha Realty, Saradha Agro Development, Saradha Exports and Saradha Garden Resorts & Hotel.
Besides, the list included names of 14 entities related to Rose Valley Group including Rose Valley Industries, Rose Valley Marketing and Rose Valley Hotels and Entertainment. 
Vaishnavi Corporate Communication, Speak Asia, Reebok India, Alchemist Infra were among the other companies against whom complaints have been received, according to the list. (Read: SFIO probing 67 companies for running Ponzi, MLM schemes)
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