Order in the matter of M/s. Zeestar Multi Club & Tours Pvt. Limited

WTM/PS/151/CIS-NRO/FEB/2016 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: PRASHANT SARAN, WHOLE TIME MEMBER ORDER Under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999 In the matter of Zeestar Multi Club & Tours Pvt. Limited In respect of: 1. Zeestar Multi Club & Tours Pvt. Limited, 2. Mr. Mrinal Atal, 3. Mr. Surendra Kumar and 4. Mr. Shailendra Prasad Badoni [PAN: AGPPB4121L] 1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) on receipt of a complaint came to know that one Zeestar Multi Club & Tours Pvt. Limited (hereinafter referred to as ‘Zeestar’/ ‘the Company’) is collecting money from the public. SEBI vide its letter dated August 20, 2010, advised Zeestar to submit certain details/ documents including its Memorandum and Articles of Association, brochures pertaining to the schemes, sample copies of registration letter and allotment letter, sample agreements, number of plans/ schemes launched/ proposed, scheme wise amount mobilization, details of regulatory approvals sought, details of the past and present directors, annual report/ financial statements, etc. The Company vide its letter dated September 04, 2010, while submitting the Memorandum and Articles of Association replied as under:

a. The Company was incorporated on March 13, 2010 and doing business of clubs, tours and travels. It does not mobilize funds for investment purposes. b. To promote the business propositions the Company intends to plan for its fund management. For the same public/ customers will be registered for travel purpose. Thereafter, the resorts and other facilities/ services will be rented out to the public/ customers under different tour plans such as religious tours, leisure tours and adventure tours. c. Neither any investment plans/ schemes have been floated by the Company nor are any funds being mobilised from the public in the nature of Collective Investment Schemes (hereinafter referred to as the ‘CIS’. The investment plans/ schemes proposed to be floated in future will be duly registered with SEBI under the SEBI Act, 1992 (hereinafter referred to ‘SEBI Act’) and the SEBI (Collective Investment Schemes) Regulation 1999 (hereinafter referred to ‘CIS Regulations’).

2. As the submissions of the Company were being examined, SEBI issued another letter dated November 02, 2010, to the Company asking therein the copy of the agreement/ contract/ document, issued/ entered into/ proposed to be entered into by the investors who subscribed for membership in any of its schemes and scheme-wise details regarding the total number of existing members along with the total amount deposited with the Company as membership fee in each scheme. However, no reply was received from the Company. SEBI vide another letter dated January 03, 2011, again asked the said details from the Company. The Company vide its letter dated January 15, 2011, while reiterating the submissions made vide letter dated September 04, 2010, submitted that the registered office of the Company is closed by the local authorities since June 26, 2010.

3. SEBI then issued various reminder letters i.e. dated March 24, 2011 and March 29, 2011 to the Company asking it to submit the information as was asked by SEBI. However, the same returned undelivered. In the meantime, information/ documents with regard to the Company was also requested from the Registrar of Companies (RoC), Kanpur vide letter dated June 02, 2011. Thereafter, SEBI vide its letter dated August 29, 2011 had advised the directors of the Company to submit the information as was asked from the Company vide earlier letters.

4. As no information was forthcoming, SEBI proceeded with its examination based on the documents available on record and the documents received from the Registrar of Companies/ documents obtained from the RoC and ‘MCA-21 portal’. On consideration of the documents available on record, SEBI prima facie found that the scheme/ arrangement of Zeestar are in the nature of CIS. Thereafter, a show cause notice (hereinafter referred to as ‘SCN’) dated January 22, 2015, was issued to Zeestar and its directors namely Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni (hereinafter collectively referred to as the ‘noticees’) advising these to show cause as to why appropriate directions under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) should not be issued against them for the alleged violations of Zeestar. The SCN indicated that the Company may send its reply within 21 days from the receipt of the SCN, failing which it shall be presumed that the Company does not have any explanation to offer and that the proceedings will be concluded ex parte on the basis of the material available on record.

5. The SCN issued to the Company and its directors except Mr. Shailendra Prasad Badoni returned undelivered. In view of the same, attempts were made to deliver the SCN by hand delivery/ pasting on the last known addresses of the noticees. However, the occupants of the last known addresses of the noticees namely Mr. Mrinal Atal and Mr. Surendra Kumar had not allowed the pasting of the SCN.

6. Thereafter, Mr. Shailendra Prasad Badoni vide his letter dated April 17, 2015 replied to the SCN. As delivery of SCN on other noticees was incomplete, SEBI issued a public notice in the newspapers namely ‘Times of India’ (English edition) and ‘Nav Bharat Times’ (Hindi edition) on April 19, 2015. As no reply was forthcoming, SEBI proceeded further and granted an opportunity of personal hearing to the noticees on August 07, 2015. The date of personal hearing was also communicated vide the public notice dated July 25, 2015, in the newspapers namely ‘Times of India’ (English edition) and ‘Nav Bharat Times’ (Hindi edition). The noticees were advised that in case they fail to appear before SEBI on the aforesaid date, then the matter would be proceeded ex-parte on the basis of material available on record.

7. On the date fixed, Mr. Shailendra Prasad Badoni appeared for the personal hearing and made oral submissions. The Company and its directors namely Mr. Mrinal Atal and Mr. Surendra Kumar had failed to turn up for the personal hearing. Considering that reasonable opportunities have already been afforded to these for making the submissions in the matter, I proceed further on the basis of the material available on record.

8. The submissions of Mr. Shailendra Prasad Badoni, in brief, are as under:

a. He had got superannuated from the ‘Indian Air Force’ in March 2000 and had started working in different organisations to supplement his income. In November 2009, he came across an advertisement in the newspaper for the post of area manager for Uttarakhand region from one ‘Star Auto Cabs’ (a group company of Zeestar) for its mineral water and beverages distribution business. The Company had appointed him for the said post in December 2009 and he had continued there till October 2010.

b. The Zeestar group headed by Mr. Ajay Kumar Atal, his son Mr. Mrinal Atal and his wife Ms. Renu Atal had discussed with him about incorporation of a company, which will work exactly like Club Mahindra/ Sterling Holidays/ Country Club. He was directed by these persons to contact the hotels and resorts in Uttarakhand, so that the clients of the Company can be sent to those places.

c. The Company (Zeestar) was incorporated on March 13, 2010 and he was made one of the directors of the Company under false assurance and promises of sharing profits in the Company. For becoming the director he had to part with ₹3.9 lakh in cash and ₹5 lakh in cheque. He had also invested money with the Company, in the name of his wife along with his relatives. The registered office of the Company was opened in May 2010 at 2nd floor, Doon Plaza, 59, Gandhi Road, Dehradun. However, the same was subsequently closed on June 26, 2010 by MDDA [Mussorie Dehradun Development Authority] due to non-sanction of map and violation of the building bye-laws.

d. As the Company had failed to commence its work and he had come to know that the Company was only collecting money with a promise of good returns to its clients by issuing post-dated cheques, he became suspicious. Thereafter, he had asked the Company to return his money and also resigned from the Company. However, the Company had not responded. His resignation was later accepted by the Company on January 20, 2011 and finally by RoC on January 26, 2011.

e. Upon follow up, the Company had closed down all its activities and had vanished from Dehradun. The Delhi office of the Company was also closed. Within a short span of few months the Company had duped him to the tune of ₹8-10 lakh from Dehradun office of the Company.

9. I have considered the SCN issued in the matter and the material available on record. It is noted that the Company was incorporated on March 13, 2010. The documents available on record are the plan details of the Company (providing the details of investment options), registration form, agreement, no objection certificate and post-dated cheques. Let me now consider these documents: a. Plan details of the Company as taken from the website of the Company are as under: Table A (1.) Plan Membership Cost Monthly Reimbursement Duration A (Religious Tour) ₹22,000 ₹1,100 45 months

B (Leisure Tour) ₹22,000 ₹1,100 45 months (2.) Plan Membership Cost Monthly Reimbursement Duration A. (Religious Tour) ₹62,700 ₹3,600 45 months B. (Leisure Tour) ₹1,43,000 ₹7,800 45 months C. (Adventure Tour) ₹1,76,000 ₹9,600 45 months ₹3,30,000 ₹18,600 45 months (3.) Plan Membership Cost Monthly Reimbursement Duration A (Premium Tour) ₹5,50,000 ₹28,600 45 months “BECOME A PROUD MEMBER OF OUR PRESTIGIUS MULTI CLUB & ENJOY YEARLY PACKAGE TOURS OF RELIGIOUS, ADVENTURE AND LEISURE DESTINATIONS THROUGHOUT INDIA & OVERSEAS. ALL EXPENSES WILL BE PROVIDED BY THE CLUB. YOUR MEMBERSHIP EARNS MONTHLY INCOME FROM YOUR COTTAGE RENTAL”. As per the details submitted along with an investor complaint, the Company had few other plans, i.e. Table B Plan no. 1 Plan Monthly Reimbursement Months Total Reimbursement A 1,15,000/- 15,100/- 12 1,81,200/- B 2,25,000/- 31,200/- 12 3,74,400/- Plan no. 2 Plan Monthly Reimbursement Months Total Reimbursement A 50,000/- 5,050/- 18 90,900/- B 1,12,000/- 11,100/- 18 1,99,800/- C 2,24,000/- 22,100/- 18 3,97,800/- Plan no. 3 Plan Monthly Reimbursement Months Total Reimbursement A 57,000/- 3,700/- 48 1,77,600/- B 1,10,000/- 7,200/- 48 3,45,600/- C 2,20,000/- 15,000/- 48 7,20,000/- The Company in its brochure had also given certain additional plans, the details of these are as under: Table C [Nano Cottage Plans] Booking P.M. Time Total Income Appreciations Final Amount Income Period Income Income 62,700/- 3,600/- 48 months 1,72,800/- - 1,72,800/- 1,42,990/- 7,150/- 48 months 3,43,200/- 25,000/- 3,68,200/- 1,75,990/- 9,360/- 48 months 4,49,280/- 30,000/- 4,79,280/- 2,19,990/- 12,200/- 48 months 5,85,600/- 37,500/- 6,23,100/- 2,74,990/- 15,300/- 48 months 7,34,400/- 45,000/- 7,79,400/- 3,29,990/- 18,600/- 48 months 8,92,800/- 52,500/- 9,45,300/- Bank Guarantee also available for ‘Nationalised Bank’ From the above, it is noted that the Company accepted the funds from the investors in the form of membership cost under various plans with varying amounts for a period of 12/ 18/ 45/ 48 months. As demonstrated above, all the plans of the Company had mentioned the monthly reimbursements on the amount paid, for the specified term.

b. For subscribing to the plans of the Company, the investor was required to submit a registration form with the Company. I have perused the ‘registration form’ of one of the investors on sample basis and note that the same is a pre-printed document having fields for name and address of the applicant, membership cost, rental reimbursement/ month, details of bank guarantee, etc. From the said document, it is noted that the Company had fixed the rental reimbursement at ₹2,520 for this investor.

c. On submission of the ‘registration form’, the investor enters into an ‘agreement’. The ‘agreement’ is between Zeestar Multi Club & Tours Pvt. Limited (referred as lessee) and the investor/ customer (referred as lessor). The relevant clauses of the agreement are as under: “… 2. The LESSOR is desirous of contributing in the infrastructure base of the Company. … 4. PERIOD OF Contract … months, commencing from … and the contract shall not be terminated before the end of the above period except as provided herein by mutual consent by either side giving 90 days notice by paying the termination charges. TERMS OF PAYMENT 5. a) Monthly Rent/ Hire charges of Rs. … per month per membership less deduction @ … all taxes, Bank Charges as applicable and agreed at the time of the contract between LESSEE and LESSOR. Net amount payable for the time of one year Bank Guarantee or 45 month Bank Guarantee will be paid by the LESSOR as required by the LESSEE at the time of the contract. In the case of one year Bank Guarantee net amount of Rs. … will be paid after expiry of the Bank Guarantee. In case Bank Guarantee for complete time period, net amount paid will be mentioned above. b) Rent/reimbursement/ compensation of Rs. … per month per membership.

Such rent shall be paid on the … and the subsequent rent to be paid on or before the … of every succeeding month regularly during the entire term of agreement (without Bank Guarantee option). c) Monthly Rent/ reimbursement/ compensation of Rs. … per month per membership less deduction @ 20% taxes plus Bank Charges as applicable. Net amount of Rs. … (payable till the total time of Bank Guarantee) such rent shall be paid. d) Monthly Rent/ reimbursement/ compensation of Rs. … per month per membership less deduction @ 30% taxes plus Bank Charges. Net Amount of Rs. … (payable till the total time of Bank Guarantee) such rent shall be paid. 6. The Company will be responsible to issue new cheque under bank guarantee after every six months till the time of expiry of the contract (e.g. bank guarantee cheques after every 6 months as mention in the bank guarantee will be sole responsible of the company to renew). … 8. Bank installments for the entire loan period will be paid by the lessee in addition to his charges/ benefits as per the agreement to the LESSOR as mentioned above. 9. For any needs insurance required will be provided by the lessee.

10. Maintenance shall be responsibility of the LESSEE for the entire period of the agreement of sites. Another document forming part of the ‘agreement’ is ‘No Objection Certificate’. The relevant clauses of the same are as under: “…. As per the policy and scheme of our company after accepting the earnest money on the basis of documents made available by you subject to the nature of investment in the infrastructure by the company opted by you, the approaches and recommends to the financial institutions for rendering financial assistance for purchase & construction of the infrastructure of the Company and only thereafter the infrastructure is put on hire charges. However, in many cases it is found that the documents submitted by the customers/ clients are not sufficient enough to get assistance from the financial institutions for balance consideration in respect of purchase price of the construction and it is in these circumstances as per the verbal consent given by you and as per the terms of agreement we utilize the entire amount paid by you in our finance and investment scheme and continue with our commitments without any default. In view of objections raised by our auditors and account department in transfer of amounts from your opted scheme to finance and investment scheme in spite of your verbal consent, your consent by signing on the “confirmation slip” enclosed herewith, Please take note if we do not receive your duly signed confirmation slip within fourteen days on receipt of this letter either accepting or rejecting it shall be considered and taken as confirmed that you have opted for the finance and investment scheme. Further more you have no objection in allowing us to use your money to invest in the infrastructure of the company.” It is noted from the agreement and brochure of the Company that it gives its investors the option to choose the plan/ scheme with or without the bank guarantee. In addition to the above, I have also seen the sample post-dated cheques issued by the Company in favour of its customers as monthly reimbursement.

10. The above discussion with regard to the documents available on record, reveals that the Company had offered schemes whereby the investors had to pay initial amount towards construction of cottages and other infrastructure for tourism purposes. The Company then promised to put such cottages on rent and had assured monthly reimbursement/ income to the investors. I also note the following in respect of the schemes of the Company i.e.; a. The Company had offered monthly returns to the investor for a period of 12/ 18/ 45/ 48 months. b. On receipt of the money from the investor, the Company approached a bank for financial assistance for the purchase/ construction of infrastructure for the Company.

The cottage/ infrastructure so purchased/ constructed was put on rent by the Company. c. The location of the land/ cottage/ infrastructure purchased/ constructed from the funds of the investors were not mentioned in the ‘agreement’. d. The bank instalments for the entire loan period were said to be paid by the Company. e. The Company had assured monthly reimbursement/ income to its investors and had issued post-dated cheques to them pursuant to the agreement. In case of default in payment for three months from the date of payment, the Company had assured to pay the interest at the rate of 24% per annum on the defaulted amount. f. The maintenance of the cottage/ infrastructure for the entire period of agreement was taken care by the Company.

11. Now I proceed to deal with the charges levelled against the Company and also to test the characteristics of the impugned schemes/ plans floated and carried on by the Company against the four conditions under Section 11AA(2) of the SEBI Act as alleged in the SCN. To conclude whether a scheme is a CIS or not, all the four conditions under Section 11AA(2) of the SEBI Act should be satisfied.

i. The first condition is that the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement. I note that the Company as per its Memorandum and Articles of Association was in the business of running a membership club for tour travel and reimbursing the monthly rentals through booking of camps and cottages. For the same, the Company had accepted money from the public/ investors under its various schemes/ plans which entails payment of membership cost/ booking amount towards construction of cottages and other infrastructures of the Company. The Company had issued receipts in respect of the amount so received from the investors. The investor were promised monthly reimbursement/ income on the membership cost/ booking amount.

As per the scheme, the Company had to construct cottages/ other infrastructure by using the booking amount and availing finance from the banks. It is important to note that the registration form/ agreement do not identify the location of land for cottages/ infrastructure. Further, there is no document on record to show that the Company had provided such details to its investors, at any stage of agreement.

From the above, it can be inferred that the funds mobilized by the Company were pooled and utilized for the construction of its infrastructure base. From the discussion, it can be concluded that the ‘contributions, or payments made by the investors, are pooled and utilised by Zeestar for the purposes of the scheme or arrangement’. Thus, satisfying the first condition as stipulated in Section 11AA(2)(i) of the SEBI Act.

ii. The second condition is that the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable from such scheme or arrangement. From the plan details as noted in the tables A, B and C above, it is seen that the Company had promised assured monthly returns to its investors in the form of monthly rent/ reimbursement. The Company had also issued post-dated cheques to its investors and had provided bank guarantees for the respective investors. Further, the Company in the agreement had also promised that in case of default in payment of monthly rent for three months, the Company would pay the interest at the rate of 24% per annum, on the defaulted amount. From the discussion, it can be concluded that the contributions or payments are made to the scheme of the Company with a view to receive profits, income, produce or property from such scheme. The scheme of the Company therefore satisfies the second condition under Section 11AA(2) of the SEBI Act.

iii. The third condition is that the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors. The fourth condition is that the investors do not have day to day control over the management and operation of the scheme or arrangement. With respect to the above said conditions, I note that the investors of the Company were not provided with the identification details of the cottages/ other infrastructures constructed with their funds. As per the agreement the Company was responsible for maintaining the sites for cottages/ other infrastructure as well as for any insurance need for the entire period of the agreement. The same suggests that the management of the cottages/ infrastructure so created remained with the Company. Further, the Company under the agreement retains the right to sublease/ rent the cottages/ infrastructure to a third party. From the same, it can be concluded that the investors did not have day to day control over the arrangement and operation of the scheme offered by the Company and the same was exercised by the Company and its directors.

I note that the investor had only decided the scheme and he/ she had no role in the construction of cottages/ infrastructure. The investments of the investors were managed and utilized by the Company. As per the scheme, till the end of the term of the agreement, the customer only gets the monthly reimbursement as promised. In view of the same, it can be concluded that the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors and the investors do not have day-to-day control over the management and operation of the scheme or arrangement. Thus, the scheme of the Company also satisfies the third and fourth conditions under Section 11AA (2) of the SEBI Act.

As all the four conditions specified under Section 11AA(2) of the SEBI Act are satisfied in this case, the schemes/ plans promoted, launched, carried on and operated by the Company are in the nature of CIS in terms of Section 11AA(1).

12. Section 12(1B) of the SEBI Act mandates that no person, shall sponsor or cause to be sponsored or carry on or caused to be carried on any CIS unless it obtains a certificate of registration from SEBI in accordance with the CIS Regulations. The Company has clearly failed to do so. Regulation 3 of the CIS Regulations provides that no person other than a Collective Investment Management Company which has obtained a certificate under the said regulations shall carry on or sponsor or launch a 'CIS'. A person can launch or sponsor or cause to sponsor a CIS only if it is registered with SEBI as a Collective Investment Management Company. Therefore, the launching/ floating/ sponsoring/ causing to sponsor any 'collective investment scheme' by any 'person' without obtaining the certificate of registration in terms of the provisions of the CIS Regulations is in contravention of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations. I note that Zeestar had launched CIS without obtaining certificate of registration from SEBI, it contravened the provisions of Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations.

13. Liability of the Directors: I note that the SCN has been issued against the Company and its directors namely Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni. From the details available on the ‘MCA-21 portal’, it is seen that Mr. Mrinal Atal and Mr. Surendra Kumar are continuing to be the directors of Zeestar.

I note that Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni were the original signatories to the Memorandum and Articles of Association of the Company. Mr. Shailendra Prasad Badoni in his reply to the SCN has said that he had resigned from the Company on January 26, 2011.

Mr. Shailendra Prasad Badoni admittedly became the director of the Company with the knowledge and on promise of sharing of profits by Mrinal Atal and his family members. Mr. Shailendra Prasad Badoni was expected to read the documents for incorporation and other documents of the Company before signing these. Further, having been director of the Company till January 26, 2011, now he cannot take shelter and seek protection on the pretext that he was duped by the Company to the tune of ₹8-10 lakh. I note that the resignation of Mr. Shailendra Prasad Badoni does not absolve him from the charges levelled in the SCN in the light of the incorporation of the Company on March 13, 2010 and the period during which he was the director of the Company. In view of the above, it can be concluded that Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni were engaged in the illegal fund mobilising activity by floating/ sponsoring/ launching, unregistered/ unauthorised CIS, as defined in the Section 11AA of the SEBI Act.

14. In view of the observations made in this Order, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 and Sections 11(1), 11B and 11(4) thereof and Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999, hereby issue the following directions: a. Zeestar Multi Club & Tours Pvt. Limited [PAN: AAACZ4100H], Mr. Mrinal Atal [PAN: AGKPA9503C], Mr. Surendra Kumar [PAN: ASHPK4559K] and Mr. Shailendra Prasad Badoni [PAN: AGPPB4121L] shall abstain from collecting any money from the investors or launch or carry out any Collective Investment Schemes including the scheme which have been identified as a Collective Investment Scheme in this Order. b. Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal and Mr. Surendra Kumar shall wind up the existing Collective Investment Schemes and refund through ‘Bank Demand Draft’ or ‘Pay Order’, the money collected by the said company under the schemes with returns which are due to its investors as per the terms of offer within a period of three months from the date of this Order and thereafter within a period of fifteen days, submit a winding up and repayment report to SEBI in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds. c. Zee Star Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal and Mr. Surendra Kumar shall not alienate or dispose off or sell any of the assets of Zeestar Multi Club & Tours Pvt. Limited except for the purpose of making refunds to its investors as directed above. d. After completing the aforesaid repayments in terms of sub-paragraph (b) above, the Company shall file a certificate of such completion with SEBI, within a period of 15 days, from two independent peer reviewed Chartered Accountants who are in the panel of any public authority or public institution.

For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India (‘ICAI’). e. Zee Star Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni are also directed to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/ securities, if held in physical form. f. Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni are restrained from accessing the securities market and are prohibited from buying, selling or otherwise dealing in securities market for a period of four (4) years. g. In the event of failure by Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni to comply with the above directions, the following actions shall follow: - Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni shall remain restrained from accessing the securities market and would further be prohibited from buying, selling or otherwise dealing in securities, even after the period of four (4) years of restraint imposed in paragraph 14(f) above, till all the Collective Investment Schemes of Zeestar Multi Club & Tours Pvt. Limited are wound up and all the monies mobilized through such schemes are refunded to its investors with returns which are due to them. - SEBI would make a reference to the State Government/ Local Police to register a civil/ criminal case against Zeestar Multi Club & Tours Pvt. Limited, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and - SEBI would make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the company, Zeestar Multi Club & Tours Pvt. Limited. - SEBI shall initiate attachment and recovery proceedings under the SEBI Act and rules and regulations framed thereunder.

15. This order shall come into force with immediate effect.

16. This Order shall be without prejudice to the right of SEBI to initiate prosecution proceedings under Section 24 and adjudication proceedings under Chapter VIA of the Securities and Exchange Board of India Act, 1992 against Zeestar Multi Club & Tours Pvt. Limited, Mr. Mrinal Atal, Mr. Surendra Kumar and Mr. Shailendra Prasad Badoni, including other persons who are in default, for the violations as found in this Order.

17. Copy of this Order shall be forwarded to the stock exchanges and depositories for necessary action.

DATE : February 04, 2016 PRASHANT SARAN PLACE : Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA