New Delhi, Nov 24, : The Supreme Court directed the Economic Offences Wing of the Mumbai Police (EoW), and SEBI, the market regulator, to file status reports on the alleged Rs 7.500 crore Ponzi scheme that defrauded 18-20 million investors. A bench consisting of Justices B.R.Gavai and B.V.Nagarathna issued an order saying: “The EOW is ordered to file a status update within four weeks.” SEBI is also directed to respond to the suggestions of the learned amicus curiae regarding the course of action it proposes to take in the event that SEBI (CIS Regulations, 1999 are applicable.This includes the method of distribution of money secured by the sale or lease of property belonging to the companies.
A note circulated by Shyam Divan, senior advocate and advocate Vipin Naair — Royal Twinkle Star Club Ltd.(RTSCL), and Citrus Check Inn Ltd.(CCIL) were both part of the Mirah Group of Companies, of whom Om Prakash Goenka served as the Chairman.
The RTSCL was and the CCIL were investigated for operating a Ponzi scheme that lured innocent investors into investing schemes promising very high returns.
“Between 18-20 million investors, their money was invested in the Corporate Debtors’ Investment Schemes.
A total of Rs 7,500 crore was collected.The returns promised to investors were not received by most of them.
The note stated that the money was diverted to associate concerns of RTSCL or CCIL.The SEBI began investigating the Ponzi scheme in 2012
The top court ordered the SEBI to finish the investigation in 6 months and determine whether the scheme proposed by the CCIL was a collective investment scheme.
Insolvency proceedings were launched against the RTSCL and CCIL just before the expiry 6 months allowed to the SEBI to investigate — under section 9 (Insolvency and Bankruptcy Code), 2016, before the NCLT, Mumbai.
The NCLT admitted corporate debtors to the corporate bankruptcy resolution process and appointed an interim resolution specialist (and later a resolution professional) on May 2, 2017.
In January 2018, the NCLT order was rescinded by the top court.
The top court ordered the agents of the commission to appear before the SEBI officer.
The SEBI was then directed to determine if the schemes were collective investment schemes within eight weeks.
The top court also ordered the Mumbai EOW to submit a status update.
A number of properties belonging to companies have been sold at auction over the past four years.More properties are expected to go under the hammer soon.
Divan suggested earlier this week that SEBI present a roadmap on how it intends to proceed with the matter.This assumes that the SEBI (Collective Investment Scheme Regulations) Regulations, 1999 would be applicable.
The Resolution Professional presented a proposal to distribute the money from the sale of properties to investors who have invested less that Rs 2,500.
The top court ordered the SEBI to submit a status update within four weeks and then listed the matter for further hearing on Monday, January 11.
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