KBCL India Ltd Case- A Brief Introduction
Incorporated in 2002, KBCL India Limited (a unit of the Kalpataru group) is a non-government organization. It is mainly involved in the agriculture and allied activities business.
KBCL India was running an unauthorized investment scheme in the garb of real estate operations. It raises deposits in the disguise of advances for unknown real estate projects and offered many options such as fixed deposits, Monthly investment schemes, Single investment schemes, recurring deposits, etc. to depositors. Through these investments, the KBCL collected over Rs 118.69 crore from investors in exchange for purchasing and developing plots/land. The company duped the gullible public, especially in rural and semi-urban areas, with a promise of huge returns and an option to withdraw the delivery of the land.
How did the KBCL India Ltd scam get busted?
Capital market regulator SEBI observed that KBCLs scheme doesnt show any resemblance to the real estate business. After investigating it further, SEBI found that the company was running an illicit collective investment scheme (CIS) without mandatory registering itself with the regulatory authority or getting any approvals. The Securities and Exchange Board of India prohibits the company from collecting any fresh funds or business or pulling off any CIS.
On 26 May 2014, the Securities and Exchange Board of India asked KBCL to refund investors money within three months along with the promised returns. The capital market regulator also banned KBCL India and its directors (Rakesh Kumar, Sashi Kant Mishra, and Vishvnath Pratap Singh) from accessing the securities market until all the money mobilized through CIS is refunded to investors.
SEBI also asked KBCL and its directors not to dispose of properties and assets and also not to divert the funds raised from CIS. Further, the SEBI also barred KBCL from launching any new schemes.
KBCL India Limited Refund Status
Even after directing KBCL and its directors/promoters to refund investors money, the company failed to pay the dues or respond to the notices of demand. Therefore, as of 10 November 2016, recovery proceedings have been initiated against KBCL India Ltd. and its directors for the failure to pay investors money with the returns promised.
KBCL India Limited Latest Update
According to the prohibitory order in the matter of KBCL India Ltd. issued on 8 August 2018, the company is barred from transferring, disposing, or charging in respect of its immovable properties. The KBCL is also asked to furnish all the details concerning movable and immovable properties duly certified by the Board of Directors.
SEBI is yet to auction KBCL properties to initiate recovery proceedings and refund investors.