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SEBI Slaps Rs50 Lakh Penalty on Royal Twinkle Star Club and Key Officials for Violating Investor Fund Collection Order
Moneylife Digital Team 18 June 2025
Investor Interest
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs50 lakh on Royal Twinkle Star Club Pvt Ltd (RTSCPL) (noticee 1) and its key officials, Omprakash Basantlal Goenka (noticee 2), Prakash Ganpat Utekar (noticee 3), Venkatraman Natrajan (noticee 4), and Narayan Shivram Kotnis (noticee 5) for non-compliance with earlier directions prohibiting collection of investor funds. The penalty is to be paid jointly and severally by all five notices.
 
In an order, Amit Kapoor, adjudicating officer (AO) of SEBI, says that "I note that in a similar matter, noticees 2 to 5 were earlier penalised in December 2018 by SEBI and since they did not prefer any appeal in the said matter and also failed to make the payment, recovery proceedings were initiated and are still in process. Since the violations in the instant matter are similar in nature, I am inclined to consider the quantum of penalty on similar lines."
 
SEBI’s scrutiny of RTSCPL was triggered by an earlier order dated 7 March 2014, issued by its whole-time member (WTM), which barred the company from accepting any further investments from investors under existing or new schemes. 
 
However, a detailed examination of RTSCPL’s bank accounts revealed that the company continued to collect funds well beyond the order’s issuance. The deposits included cash and bank transfers, indicating clear non-compliance with SEBI’s directive.
 
In 2014, SEBI had barred Royal Twinkle Star Club and its directors from collecting money from investors. The company continues to collect money using a new name, Citrus Check Inn. In March that year, Moneylife had written to SEBI about it. (Read: MONEYLIFE IMPACT: SEBI bars Royal Twinkle Star Club from collecting money)
 
Earlier in August 2015, the market regulator had directed Royal Twinkle Star Club Ltd (RTSC) and its four directors to refund within three months, the money collected from investors under its holiday package plans. The markets regulator also refused to lift a ban on Citrus Check Inns (new avatar of RTSC) and its directors in a 'collective investment scheme' (CIS) case, promising returns on 'holiday plans'. (Read: Royal Twinkle Star Club, directors asked to wind up ‘holiday’ investment schemes)
 
In January 2020, SEBI issued a notice to auction properties of Royal Twinkle Star Club and Citrus Check Inns at Alappuzha, Lower Parel, Bengaluru and Lonavala. Both Royal Twinkle Star Club and Citrus Check Inns were involved in an alleged Ponzi scam worth Rs7,500 crore (Read: Royal Twinkle Star Club & Citrus Check Inns: SEBI Issues Notice to Auction Properties at Alappuzha, Lower Parel, Bengaluru and Lonavala)
 
The latest adjudication proceedings under Section 15HB of the SEBI Act, 1992, and relevant SEBI Adjudication Rules, were initiated against the company and the aforementioned individuals holding various capacities within the organisation. The accused included non-executive directors who, despite their titles, were actively involved in marketing and sales promotion, and hence, bore responsibility for adherence to the regulatory mandate.
 
The accused argued that no new schemes were launched post the March 2014 order, and some contended that funds collected via agents or auto-debit systems were beyond their direct control. 
 
SEBI, however, found these explanations unconvincing. The regulator emphasised that with over 51 branches and a wide agent network, the company had a clear obligation to ensure compliance and communicate the order effectively to all collection points. The failure to do so, even up to August 2015, reflected a disregard for investor protection norms.
 
Further, the officials could not adequately explain or justify the significant cash deposits in the company’s bank accounts following the order. The SEBI adjudicating officer observed that these lapses adversely impacted numerous investors whose funds remained blocked or unreturned due to the continued acceptance of monies.
 
In conclusion, the Rs50 lakh penalty, jointly and severally payable by Royal Twinkle Star Club and its key officials, reiterates the importance of adherence to SEBI’s orders and the need for transparent and responsible conduct in handling investor funds. 
 
Comments
mphalke42
10 months ago
now any update On this case when we will get money
Reply
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