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SEBI to e-auction assets of ponzi firm

By The Assam Tribune
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KOLKATA, Oct 5 � Adopting a new strategy to collect funds for repayment to investors, the capital markets regulator, SEBI will conduct an e-auction of land and buildings of a company that had garnered money through so-called �chit fund� schemes, reports PTI.

The unauthorised money collection schemes are widely known as �chit funds� in West Bengal and other Eastern and North-eastern States, although their operators are not registered as �chit fund� companies in most cases.

In many such cases, regulators and government agencies such as the SEBI (Securities and Exchange Board of India) and SFIO (Serious Fraud Investigation Office) have found that these were �ponzi� or illegal money circulation schemes where new investors were given returns from funds of earlier investors.

This has been the case for the Saradha Group also, whose schemes were among the most high profile and the SFIO recently submitted its final report in the case to the Government. The SEBI had passed an order against a Saradha entity last year.

In the latest case, the SEBI has initiated the process for the sale of the assets of Tower Infotech Ltd as per an order from the Calcutta High Court, under which an e-auction would be conducted for the sale of land and buildings of the company.

The bids have been invited by the SEBI till October 27, while auction for the sale would take place on October 30, the regulator said in its tender notice.

The High Court has directed the SEBI to sell certain assets of Tower Infotech and distribute the proceeds among duped depositors and debenture holders. This is probably the first instance of the SEBI conducting an e-auction to liquidate assets of a deposit-mobilising company for refund to the investors.

In some other cases, the SEBI has already ordered the sale of shares held by certain companies that were found to be in default of payments as directed by the regulator.

Through enhanced powers, the SEBI has been allowed to attach and liquidate the assets of defaulter entities, including in cases of illicit money schemes. The SEBI has also been given the power to act against companies running illicit money pooling schemes involving Rs 100 crore or more.

The four properties of Tower Infotech being sold have a total reserve price of over Rs 17 crore.

As per the SEBI�s tender notice, bids have been invited along with a payment for an amount equivalent to 10 per cent of the reserve price as Earnest Money in connection with the sale of the listed assets or properties of Tower Infotech.

The properties listed for sale through the auction include a land parcel with a four-storeyed building in Kolkata with a reserve price of Rs 6.36 crore and another land with a three-storeyed lodge building and marriage hall (among others) in Medinipur with a reserve price of about Rs 2.94 crore.

Two other properties include land plots with a three- storeyed hospital building and an office building (reserve price of Rs 2.32 crore) in South Parganas and land with a two-storeyed auditorium hall, a single-storeyed restaurant building, a single-storeyed office building and a pump room (reserve price of Rs 5.56 crore).

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SEBI to e-auction assets of ponzi firm

KOLKATA, Oct 5 � Adopting a new strategy to collect funds for repayment to investors, the capital markets regulator, SEBI will conduct an e-auction of land and buildings of a company that had garnered money through so-called �chit fund� schemes, reports PTI.

The unauthorised money collection schemes are widely known as �chit funds� in West Bengal and other Eastern and North-eastern States, although their operators are not registered as �chit fund� companies in most cases.

In many such cases, regulators and government agencies such as the SEBI (Securities and Exchange Board of India) and SFIO (Serious Fraud Investigation Office) have found that these were �ponzi� or illegal money circulation schemes where new investors were given returns from funds of earlier investors.

This has been the case for the Saradha Group also, whose schemes were among the most high profile and the SFIO recently submitted its final report in the case to the Government. The SEBI had passed an order against a Saradha entity last year.

In the latest case, the SEBI has initiated the process for the sale of the assets of Tower Infotech Ltd as per an order from the Calcutta High Court, under which an e-auction would be conducted for the sale of land and buildings of the company.

The bids have been invited by the SEBI till October 27, while auction for the sale would take place on October 30, the regulator said in its tender notice.

The High Court has directed the SEBI to sell certain assets of Tower Infotech and distribute the proceeds among duped depositors and debenture holders. This is probably the first instance of the SEBI conducting an e-auction to liquidate assets of a deposit-mobilising company for refund to the investors.

In some other cases, the SEBI has already ordered the sale of shares held by certain companies that were found to be in default of payments as directed by the regulator.

Through enhanced powers, the SEBI has been allowed to attach and liquidate the assets of defaulter entities, including in cases of illicit money schemes. The SEBI has also been given the power to act against companies running illicit money pooling schemes involving Rs 100 crore or more.

The four properties of Tower Infotech being sold have a total reserve price of over Rs 17 crore.

As per the SEBI�s tender notice, bids have been invited along with a payment for an amount equivalent to 10 per cent of the reserve price as Earnest Money in connection with the sale of the listed assets or properties of Tower Infotech.

The properties listed for sale through the auction include a land parcel with a four-storeyed building in Kolkata with a reserve price of Rs 6.36 crore and another land with a three-storeyed lodge building and marriage hall (among others) in Medinipur with a reserve price of about Rs 2.94 crore.

Two other properties include land plots with a three- storeyed hospital building and an office building (reserve price of Rs 2.32 crore) in South Parganas and land with a two-storeyed auditorium hall, a single-storeyed restaurant building, a single-storeyed office building and a pump room (reserve price of Rs 5.56 crore).

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