SEBI takes action against Alchemist Infra Realty Ltd.

Posted by Ray on July 7, 2015 in Financial Matters | 0 comments

It appears that for the investors who have deposited money in Alchemist Infra Realty Limited’s different fixed deposit schemes, it will be a long wait now until they may hope for a refund and recoup their losses.

There have been considerable uncertainties of late about the financial status of the company and  many complaints from investors that cheques issued by the company have bounced and now the Securities and Exchange Board of India’s (SEBI) order confirms that Alchemist Infra Realty and its promoters/directors have not repaid its investors within the time earlier allowed by SEBI. This has been reported by both The Economic Times and The Times of India in their editions dated 28 May 2015.

In its order SEBI has directed prosecution proceedings against Alchemist Infra Realty Limited and its directors as well as attachment of their properties to recover the money. SEBI has also remarked that the matter would now be referred to the Ministry of Corporate Affairs to initiate the process of winding up of the company. SEBI would also ask state governments and local police to register civil or criminal cases against the company, its promoters, directors and other top officials “for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds”.

Earlier in 2013 after finding the company to have raised funds from public to the tune of over Rs 1,000 crore in violation of the collective investment scheme regulations, Sebi had passed its refund order against Alchemist Infra Realty Limited on June 21, 2013.

Thus, it is quite probable now that those who have invested in the company will have the same fate as so many others who, in the past, invested their hard-earned money in companies that have dubious backgrounds and which finally resulted in financial scams that involved crores of rupees. It will be difficult for such investors to get back their hard-earned money which they had invested in the hope of getting a few percentage points more interest than the much safer bank fixed deposits offered to them.

The full text of the order issued by SEBI can be found here. Readers may also find this report published in The Hindu relevant in this context. A recent report published in The Indian Express states that the “Kolkata Police has formed an SIT to probe allegations of cheating investors against three companies of Alchemist Group, owned by Rajya Sabha MP from TMC K D Singh.” More of that here.

Depositing your hard-earned money? Check twice!

Recently the Reserve Bank of India (RBI) has launched Sachet, a website from where you can get information about companies that are allowed to receive deposits. You can also lodge complaints and share information about illegal acceptance of deposits from unscrupulous entities on the same site. At present the website is available only in English and Hindi but it may soon be available in other regional languages.