Sebi orders attachment of bank, demat accounts of Rose Valley, 4 others to recover over Rs 5,000 cr

Markets regulator Sebi on Wednesday ordered attachment of bank accounts as well as share and mutual fund holdings of Rose Valley Hotels and and its then directors to recover investors’ dues totalling over Rs 5,000 crore. This comes after they failed to comply with Sebi directions to refund the investors. In November 2017, the regulator had ordered Rose Valley and its then directors to refund thousands of crores to investors who had parked money in holiday membership plans of the group as it declared those schemes as illegal.

Proceedings have been initiated for recovery of Rs 5,000 crore, along with returns due to investors, from Rose Valley and its then directors — Gautam Kundu, Ashok Kumar Saha, Shibamoy Dutta and Abir Kundu, the Securities and Exchange Board of India (Sebi) said in an attachment notice.

In its notice, Sebi asked banks, depositories and mutual funds not to allow any debit from the accounts of Rose Valley and its then directors. However, credits have been permitted.

Further, the markets watchdog has directed all banks to attach all accounts, including lockers, held by the defaulters.

“There is sufficient reason to believe that the defaulters may withdraw the amounts/dispose of the securities in the accounts held with you and realisation of amount due under the certificate would in consequence be delayed or obstructed,” Sebi noted.

“In order to protect the interest of investors, it is necessary to attach the assets of the defaulters including bank, demat accounts and mutual funds investment to prevent any alienation of the same,” it added.

On Monday too, the regulator had issued similar directions against the company and its then directors. The recovery proceeding was initiated against them to recover Rs 1,006.70 crore collected through the issuance of non-convertible debentures (NCDs) to investors.

In November 2017, the regulator ordered Rose Valley and its then directors to wind up the ‘Holiday Membership’ plans and refund the money collected from investors within three months.

According to the regulator, the various plans offered by the firm with a promise of return qualify as a Collective Investment Scheme (CIS).

As per the Sebi order, more than 21.9 lakh investors are believed to have invested in holiday membership plans.

In the balance sheet filed by the firm for 2012-13, an amount of around Rs 5,000 crore is reflected under other current abilities that were refundable liabilities under the membership plan

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