MUMBAI, January 30: The Securities and Exchange Board of India (SEBI) has dragged plantation company Golden Forest to court as a measure of abundant caution to ensure that it complies with Section 11 (b) of the SEBI Act.The regulatory body which moved the Mumbai high court on January 21 has sought the court's intervention to prevent Golden Forest from making any payments to promoters and ensuring that monetary transactions are limited to meeting day-to-day requirements. It had already, in its capacity as a watchdog of the sector, warned the company against non-compliance of section 11(b) of the SEBI Act. However, sources said that the court had also been moved as a measure of abundant caution in case the company questions the power of the regulatory body in putting any curbs on them. Although the government has designated SEBI as the regulator of collective investment schemes, it is still only in the process of forming the guidelines to regulate them. Following SEBI's petition, the court had passed aninterim order against the company on January 22, asking it to comply with SEBI's order. The case came up for hearing on January 29 but was adjourned till February 16.
In the meanwhile, Golden Forest has asked for an extension of 10 days from SEBI to present its case. The company was to have a hearing with the SEBI chairman on January 29.
The regulatory body had earlier issued a show cause notice to the company following a series of investigations carried out on many of the plantation companies. The market watchdog has already passed orders to such companies, asking them not to collect any fresh deposits. They have also asked the company not to sell any of their assets and land. The Chandigarh-based company had already collected more than Rs 1,000 crore in deposits without possessing proper assets to match the collection. The SEBI-appointed panel on plantation companies, chaired by former UTI chairman SA Dave, met for the first time recently and had a discussion on how these companies can be regulated. Themembers on the committee were unanimous on the need for total regulation of these plantation companies and held discussions on the definition of a collective investment scheme, insurance of investors in these schemes and the accounting policies.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
