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CIS case: Sebi bars USK India from raising funds from public

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Mumbai: Taking action against illegal investments, Sebi today prohibited USK India from raising fresh capital from the public, with immediate effect. The order comes following a complaint received by Sebi against USK India, alleging that the funds were mobilised by the company through agents and high rates of commission were being paid to them.

Securities and Exchange Board of India (Sebi) found that USK India was running ‘collective investment schemes (CIS)’ without obtaining registration from the regulator. The company was inviting investments from the general public through its ‘development and maintenance of land’ scheme.

In an order, Sebi said “… the scheme offered by USK India in the name of real estate business is nothing but a smokescreen for its fund mobilizing activity with a resultant promise of returns,” which prima facie satisfies conditions of CIS.” Accordingly, Sebi has directed the company and its directors — Sanjay Verma and Shiv Ram Singh Tomar — “not to collect any fresh money from investors under its existing schemes” as well as “not to launch any new scheme”.


They also have “to immediately submit the full inventory of the assets, including land obtained through money raised”. Besides, the company and its directors have been barred from disposing off or alienate any of the properties or assets owned or acquired through the money raised.

Further, they cannot divert any funds raised from public at large which are kept in the bank account of the company. They have to furnish all details of its investors, among other information, to Sebi.

These directions would take effect “immediately and shall be in force until further orders.”