Securities and Exchange Board of India (SEBI) seems to be in the
habit of jumping in deep waters without realizing its consequences and
then shying away from what it has been created for in 1992 by virtue of a
special statute.
During its existence of about two decades, its role as a benefactor of investors has often come into question. One such case where SEBI went overboard by taking harsh unrealistic actions in the name of 'investor protection' and then later shrugging off from its duty when the going got tough is that of Golden Forest India Limited (GFIL), where the investors are for the past 14 years, lurching in gloom on the fate of their hard-earned money, courtesy SEBI. The investors had staged protest against SEBI in a hope to get back their money but till now, have not got any respite.
Golden Forest India Limited was a Chandigarh based company which started its business in 1987 by creating social forestry farms. By 1998, the company had raised around Rs. 1,037 crores of money. SEBI banned GFIL by citing that it is not safe for investment when the company declined to get itself registered with SEBI. The regulator slapped the order of selling the assets of the company. Having done this, the regulator also moved Bombay High Court seeking a restriction on the company's business. The Bombay High Court asked SEBI as well as the Reserve Bank of India to set up a committee for studying the matter. Subsequently, GFIL came up with a scheme for repaying its investors and informed about the same to the court. The court, after considering the plan, appointed Justice (Retired) M.L. Pendse to repay the investors by selling 19 properties belonging to the company. Consequently, a multitude of petitions were filed by the investors in different High Courts throughout India demanding a stay on the sale of these 19 properties. Owing to the prevailing chaos, numerous cases were also filed against GFIL and its proprietors in various courts.
For More:-
http://samacharlive.in/business/sebis-adventurous-investor-protection-costs-investors-dearly/
During its existence of about two decades, its role as a benefactor of investors has often come into question. One such case where SEBI went overboard by taking harsh unrealistic actions in the name of 'investor protection' and then later shrugging off from its duty when the going got tough is that of Golden Forest India Limited (GFIL), where the investors are for the past 14 years, lurching in gloom on the fate of their hard-earned money, courtesy SEBI. The investors had staged protest against SEBI in a hope to get back their money but till now, have not got any respite.
Golden Forest India Limited was a Chandigarh based company which started its business in 1987 by creating social forestry farms. By 1998, the company had raised around Rs. 1,037 crores of money. SEBI banned GFIL by citing that it is not safe for investment when the company declined to get itself registered with SEBI. The regulator slapped the order of selling the assets of the company. Having done this, the regulator also moved Bombay High Court seeking a restriction on the company's business. The Bombay High Court asked SEBI as well as the Reserve Bank of India to set up a committee for studying the matter. Subsequently, GFIL came up with a scheme for repaying its investors and informed about the same to the court. The court, after considering the plan, appointed Justice (Retired) M.L. Pendse to repay the investors by selling 19 properties belonging to the company. Consequently, a multitude of petitions were filed by the investors in different High Courts throughout India demanding a stay on the sale of these 19 properties. Owing to the prevailing chaos, numerous cases were also filed against GFIL and its proprietors in various courts.
For More:-
http://samacharlive.in/business/sebis-adventurous-investor-protection-costs-investors-dearly/
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