Submits 230 boxes of ‘documents’ as evidence

Sending two data entry operators to represent its case before the investigating authority, and submitting 230 boxes of ‘documents’ as evidence were part of the ploy employed by the Saradha Group to scuttle the probe against its ‘collective investment scheme’ (CIS). The group also said that its data were stored in Boston, U.S.

The investigation was launched by the Securities and Exchange Board of India (SEBI) following a April 23, 2010, letter sent by the Director, Economic Offences Investigation Cell, West Bengal.

It took SEBI three years to deliver an order against Saradha Realty India Ltd., asking it to wind up its schemes and refund money collected through unauthorised CIS.

Delaying tactics

In its order on Tuesday SEBI said that in early April 2013, (when the group had already slapped closure notices on some of its firms), the company tried to dodge investigations by sending two junior employees to SEBI Kolkata office to represent Saradha’s case. The two were not acquainted with the case, being data entry operators, the order said. This was seen as delaying tactics.

Reminiscent of the loads of document dumped on investigators in another high-profile case (Sahara), the Saradha group too unloaded on SEBI a total of 230 boxes of ‘documents’ most of which were irrelevant. “It was noted that the noticee was not providing relevant information,” the order said.

The SEBI said that over the last one year, it had taken up matters regarding CIS schemes in West Bengal. However, the regulatory body expressed its frustration against injunction orders being granted to companies by district courts.

Appellate power

It said that under the SEBI Act, appellate power was of the Securities Appellate Tribunal and then the Supreme Court.

“It is ridiculous that one district court after another are issuing injunction orders against SEBI. In some cases, SEBI has been able to get directions from the Calcutta High Court with costs imposed on petitioners who were agents of the CIS company. However, new injunction orders were obtained,” a SEBI official said.

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