Order in the matter of Suvidha Farming and Allied Limited.

ORDER Under sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 and regulation 65 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 and in continuation to order dated January 11, 2016.

In respect of – S. Noticees CIN/ DIN PAN No. 1. Suvidha Farming and U01400MP2010PLC023082 AAOCS5986Q Allied Limited 2. Vinod Kumar Shankhwar 02444432 ATNPS4287P 3. Rajendra Karn Rajpoot 02444466 AJAPR9252L 4. Pardeshi Ram 03118992 AVGPS2415J 5. Jagdish Bisvas 03119157 AOWPB8544E 6. Rajneesh Dutta 06736734 ALEP D7075R

1. Securities and Exchange Board of India (“SEBI”), vide Order dated January 11, 2016 (final order) held that Suvidha Farming and Allied Limited (Suvidha / Company) and its directors namely, Vinod Kumar Shankhwar, Rajendra Karn Rajpoot, Pardeshi Ram, Jagdish Bisvas, and Rajneesh Dutta were held liable for launching and operating unregistered Collective Investment Scheme (CIS), in violation of section 12(1B) of the Securities and Exchange Board of India Act, 1992 (“the SEBI Act”), Regulation 3 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 (“the CIS Regulations”) and Regulation 4(2)(t) of the Securities and Exchange Board of India (Prohibition of Fraudulent Order in the matter of Suvidha Farming and Allied Limited and Unfair Trade Practice Relating to Securities Market) Regulations, 2003 (“the PFUTP Regulations”). In view of the same, Suvidha and Vinod Kumar Shankhwar, Rajendra Karn Rajpoot, Pardeshi Ram and Rajneesh Dutta were directed to refund the money collected from investors along with the returns as per offer within a period of 3 months from the final order.

2. Suvidha filed Appeal No.126 of 2016 against the said order of SEBI before the Hon’ble Securities Appellate Tribunal (SAT) and the Hon’ble SAT vide order dated September 28, 2017 directed Suvidha to file a representation before SEBI within 3 weeks wherein the details of money refunded and mode and manner of repayment of balance amount should be stated.

3. Suvidha through its 2 directors submitted its representation vide a letter dated October 17, 2017, wherein it has interalia submitted :- a) That out of ₹ 28,22,39,997.50/-, the company has already refunded ₹ 4,35,66035.50/- and an amount of ₹ 23,86,73,962/- is yet to be repaid to customers. b) That the Company was not selling its assets but was repaying investors from the money generated from trading goats as well as from cash in hand. c) That all the money collected from the investor is safely deposited in FDR, Gold and Land. The company has land in hand which can be sold and the amount can be paid to investors. d) That due to demonetization, the Company does not have any customers for land. e) That at present the market value of the land of the Company is ₹ 29,37,10,900/- and the company is in process to sell the land. The company requires SEBI’s permission to sell the land and would need at least 12 months time to dispose off the land and repay the investors.

4. I have considered the final order dated January 11, 2016 and the representation filed by the Company. Company in its representation has contended that due to the restraint imposed by SEBI, it is unable to sell its land and repay the investors. However, it is observed that para 16 of the final order specifically deals with the request of the company to sell properties and for the purpose of making refunds to the investors from whom mobilization was made, the permission was granted. I note that though the final order allowed the company to sell any of its assets for the purpose of refund, it has now made the representation as if no such permission existed. Clearly therefore, no further permission is required from SEBI to sell the property and the representation made by the company appears to be a dilatory ploy.

5. Further, the Company has submitted that it has repaid ₹ 4,35,66,035.50/- to its 11,892 investors. In this regard, it is noted that the final order had explicitly directed that in case the Company had made refunds, as claimed in its representation, it shall submit winding up and repayment report to SEBI, 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 as directed at paragraph 17, sub-paragraph (2) in the final order. However, no proof in support of this repayment has been submitted to SEBI in spite of the final order and Order of Hon’ble SAT dated September 28, 2017 to do so.

6. The Company has also submitted that the investors’ money has been invested in Land, Gold and FDR. However, no reason has been specified by the company as to why the investment in Gold and FDR has not been liquidated to repay the investors even after lapse of nearly 2 years from the SEBI final order. The company admitted having mobilized ₹ 28,22,39,997.50 and it claims to have refunded an amount of ₹4,35,66,035.50. From their submission, it appears that Company is only taking into account the repayments towards the principal and is silent about the returns that are owed to the investors along with the refund of their investments.

7. It is also seen that the Company has submitted that the market value of land has increased to ₹ 29,37,10,900. However, no details of the land or any document showing valuation has been submitted by the Company. Details and supporting proof of the immovable property claimed to be owned by the company have not been submitted by the company. As per the company, it has yet to repay ₹ 23,86,73,962/- to the investors. In absence of any proof, no conclusion can be drawn in relation to the number of investors already repaid and yet to be repaid and the value of land assets of the company.

8. Further, the Company has sought minimum one year to sell the land and make repayment. As noted earlier, it has been nearly two years since the order has been passed and in these two years, as per the company’s submission, only 15.4% money has been repaid. It is also noted from the final order that from 2,69,905 investors, money was mobilized from financial year 2010 to 2014 and the company could repay only 11,892 investors i.e. less than 10% investors in nearly two years. Considering the paltry number of investors refunded, meagre amount of repayment claimed to be made and the lack of efforts of the Company to monetize its liquid assets, I am of the opinion that the company is just engaging itself in correspondence with SEBI with the idea of delaying and protracting compliance with the final order. This is also to avoid other actions being taken against it for the failure or delay in compliance of the final order. The proposal is not genuine and does not merit any consideration.

9. In view of the above and in the interest of investors and in continuation of order dated January 11, 2016, I direct that Suvidha Farming and Allied Limited and its directors namely, Vinod Kumar Shankhwar, Rajendra Karn Rajpoot, Pardeshi Ram and Rajneesh Dutta, shall complete all refunds by March 31, 2018 and shall furnish evidences to establish that refunds have been made to all the investors.

10. In case the refunds are not made till March 31, 2018, the consequential actions mentioned in para 17 of the final order dated January 11, 2016 shall follow immediately.

Date: December 22, 2017 G. MAHALINGAM Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA