List of Entities barred by SEBI from raising money under ‘Collective Investment Schemes’

Securities Exchange Board of India (SEBI) cautions investors not to invest in ‘Collective Investment Schemes‘ offered by the entities that are barred by it. It has issued a press release on 29th July, 2015 and provided the list of such barred business entities or companies.

These companies are not registered with SEBI and  have been collecting funds / mobilizing money without filing the ‘offer documents’ with SEBI. As per SEBI, appropriate actions have been taken against these companies and its Directors.

As part of interim directions, SEBI inter-alia directs the entities and its Directors to stop collecting further money under existing / new schemes, not to launch any new scheme or float any new companies/firm to raise fresh money, not to divert or alienate any assets or money collected. As part of final directions, SEBI directs winding up of unregistered schemes of the entities, repayments to investors and inter-alia also debars the entity and its Directors from accessing the Capital markets.

What are Collective Investment Schemes (CIS)?

A Collective Investment Scheme (CIS), as its name suggests, is an investment scheme wherein several individuals come together to pool their money for investing in a particular asset(s) and for sharing the returns arising from that investment as per the agreement reached between them prior to pooling in the money.

Investors and general public have been cautioned not to invest in ‘Collective Investment Schemes‘ offered by the barred entities.

Further, investors are advised to bear the following cautionary checks before investing in a collective investment scheme:

1. Whether the entity is registered with SEBI
2. Whether the scheme (CIS) has filed an offer document with SEBI
3. Subscription to CIS units is permitted only though a banking channel, no cash transactions are permitted
4. No guaranteed or assured returns are permitted (at most, an indicative return may be stated in offer document)

A list of the Companies against whom orders have been passed by SEBI since 2011 till June 2015 is given below;

(If any of the following unregistered entity/ies are found to be collecting / mobilizing money, investors are advised not to subscribe to such collective investment schemes / deposit schemes and to report the same to SEBI and State authorities including Police authorities immediately, along with appropriate details / documents.)

How to contact SEBI and give feedback on CIS cases?

SEBI has provided a facility to share your grievances regarding Collective Investment Schemes. If you have been duped by any of the above entities, you may contact SEBI and share your feedback.

• Visit SEBI’s website – click here
• Select the option ‘Collective Investment Scheme’ under ‘Relating to’ field and share your grievances / feedback with SEBI.

(Image courtesy of Stuart Miles at FreeDigitalPhotos.net)