SEBI Issues Cautionary Advice Regarding Dubious Investment Schemes
Issuing public advertisements, the Securities and Exchange Board of India (SEBI) has urged investors to exercise caution concerning potentially fraudulent collective investment schemes.
The advertisements disseminated by SEBI specifically target collective investment schemes (CIS), cautioning the public against them. These SEBI advertisements primarily scrutinize schemes operated by MPS Greenery Developers and Rose Valley Real Estate and Construction.
SEBI warns the public from investing in dubious schemes.
Both entities are suspected of operating Ponzi-like investment schemes. While promising attractive returns to investors, the safety of invested funds may be compromised.
SEBI's public warnings against these schemes appeared in major national and regional newspapers. These advertisements were reportedly a response to the Saradha scam, which illicitly amassed substantial funds from numerous investors.
Following the Saradha incident, many firms have introduced similar schemes. Amidst the eroded investor confidence caused by the Saradha scam, these investment firms are actively engaging with the media to alleviate investor concerns.
SEBI shows danger signal to those who raise funds through CISs.
Beyond the two firms already mentioned, at least six other companies, including Aspen Projects, Jasoda Real Estate, iCore, Prayag Group, Vibgyor Allied Infrastructure, and Vibgyor Gold, featuring comparable schemes, have advertised on television and in print media.
According to a SEBI advertisement, "Rose Valley Group released an appeal in a major newspaper on April 24th of this year."
The investment entity contested SEBI’s directive, which was initially issued in January 2011 against the firm, by appealing to the Calcutta High Court.
Although the High Court has concluded its hearings, it has not yet delivered a final decision regarding the matter.
SEBI’s advertisements cautioned potential investors against the dubious methods employed by Rose Valley Group, mentioning particularly that the group has not sought authorization from, nor is it registered with, the market regulator.