http://www.business-standard.com/india/news/hc-quashes-rose-valley-writ-asks-it-to-move-sebi-forum/130023/on
HC quashes Rose Valley writ, asks it to move Sebi forum
Press Trust of India / Kolkata March 23, 2011
The High Court here rejected a writ petition of Rose Valley Real Estate and
Construction company against Sebi's order restraining it from receiving money
under its collection scheme, saying it should approach the appellate forum of
the capital market regulator.
While observing that the court has no jurisdiction to entertain such petition,
Justice Jayanta Biswas gave leave to the company to move the Sebi appelate
forum
on the issue.
According to Rose Valley's petition, the capital market regulator on January 3
had passed an order directing Rose Valley not to collect money for its
business.
The Sebi had barred West Bengal-based Rose Valley from raising money from the
public on the grounds that it did not seek the watchdog's permission for
running
a scheme.
While Rose Valley claimed it was mobilising funds for real estate business,
Sebi
held the company was running a Collective Investment Scheme (CIS) and did not
seek the market regulator's permission, which is mandatory for such products.
The regulator directed Rose Valley, "not to collect any money from investors or
to launch any scheme, not to dispose of any of the properties or delineate
assets of the schemes and not to divert any fund raised from public at large
kept in bank account and or at the custody of the company."
The company challenged the Sebi order before the Calcutta High Court, claiming
that it had no authority to decide on the issue as the company was not listed
before the regulatory body.
But Sebi stated it had violated its regulations and that collective investment
scheme was a type of collection from the public that Sebi has power to regulate.
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