Markets regulator Sebi has ordered Prosperity Agro India and its directors to wind up existing collective investment scheme and refund the money raised from investors within three months.
The Securities and Exchange Board of India (Sebi) has also barred the firm and its directors from the capital market for four years.
Besides, the directors have been restrained from holding position as director or key managerial personnel of any listed company for four years.
A probe conducted by Sebi found that Prosperity Agro India Ltd (PAIL) -- formerly known as Samruddha Jeevan Agro India Pvt Ltd (SJFIL) -- pooled the funds from the investors for its schemes towards rearing of calves, goats and buffaloes through various plans. It had collected over Rs 66 crore from around 80,000 investors till 2013.
"I note that PAIL has not obtained any certificate of registration from Sebi under the CIS Regulations for its fund mobilising activity from the public, for the 'schemes' offered by it," Sebi Whole-Time Member G Mahalingam said in an order.
"I also find that the fund mobilising activity of PAIL through its various schemes was done without obtaining the necessary registration and was therefore illegal and amounts to a fraudulent practice in terms of... the PFUTP (Prohibition of Fraudulent and Unfair Trade Practice) Regulations," he added.
Sebi, through an interim order in 2013, had barred Samruddha Jeevan Foods from collecting money from the investors under its schemes. Subsequently, a final order was passed in 2015, wherein it was held that SJFIL was running collective investment scheme (CIS) without getting regulatory nod.
After passing the interim order in the matter, Sebi had received an investor complaint in 2014 alleging that instead of refunding the money on maturity, SJFIL transferred its membership to PAIL and later on to Samruddha Jeevan Multi- State Multipurpose Co-operative Society Ltd.
In this case, Sebi, through an interim order in 2015, had prohibited PAIL and its directors from raising money from investors under its existing scheme or launching any new scheme.
Also, it had directed the firm to give details of accounts transferred from SJFIL to PAIL and from PAIL to Samruddha Jeevan Multi-state Multipurpose Cooperative Society
In its submission to Sebi, PAIL said it received Rs 15 crore in 2012-13 from SJFIL towards utilisation of livestock farming facility of the company at its project situated at Valsad (Gujarat) and Jalki (Karnataka).
"The conduct of the company and its directors indicates that it keeps changing its name, registration and its constitution pattern so as to avoid scrutiny of any regulator from time to time," Sebi said.
In an order passed on August 8, Sebi has barred PAIL and its directors -- Santosh Shrawan Mali, Santosh Kaluram Paygude, Vanshree Tukaram Chidrawar, Hrishikesh Vasant Kanase and Dattatray Madhav Yadav -- abstain from collecting payments, either directly or indirectly, from the investors or launch or carry out any CIS.
"PAIL and its directors are jointly and severally liable to wind up its existing CIS and refund the contributions or payments collected from investors under the schemes with returns due to the investors within a period of three months," Sebi said.
In case, they fail to comply with Sebi's directions, the regulator would initiate recovery proceedings against them.
Also, they have been restrained from the securities market "till the directions for refund to investors are complied with... to the satisfaction of Sebi and repayment completion certificate is submitted to Sebi and for a further period of four years from the date of completion of refund," it said.