[Resolved]  KBCL India Limited — Collective Investment Scheme Fraud

Address:

Uttar Pradesh

Saradha Realty ( West Bengal )is just one of the companies raising small deposits from investors. The number of such companies could actually be 700 or 800. The ones already under the scanner and that most people know is Mathura based Kalptaru Group. Kalptaru Group’s KBCL India Ltd is one of these. This company is operating Collective Investment Schemes (CIS) without registering itself for such activities with the regulatory authority. This company is not actually registered as chit funds but its activities are more in the nature of Multi-Level Marketing, collective investments or other money-circulation schemes which are broadly known as 'ponzi' schemes. Into the affairs of Mathura-based Kalptaru group and other such entities across the country, authorities should do well to conduct investigations and take action before the scams get big and a lot of investors lose money in the bust. Govt. of India and the State Govt. should focus its probe on violation of Collective Investment Scheme (CIS) norms by this group.
The first company of this group, KBCL India Ltd, started working in Mathura in 1995. This company is operating from Mathura, Uttar Pradesh. Authorities of Kalptaru group stated that M/s KBCL India Ltd is a public limited, listed company and is engaged in construction, development and management of agricultural land, townships, shopping malls, group housing society etc. in various states in India and did not run any collective investment scheme. Company is not working chit fund business. The concern relates to Real Estate but it is well known that the fact is different. Kalptaru group has more than 50 firms registered with the RoC (Registrar of Companies) for businesses across sectors including real estate, exports, automobiles, shopping mall, agro development, media, entertainment, education and publishers among others. Most of these companies are registered with names starting with ‘Kalptaru’, while there are also firms with other names. The preliminary probe into Kalptaru group’s Kalptaru Agro India Ltd in 2003, capital markets regulator SEBI said that the company is engaged in illegal money collection activities. SEBI has already passed an order against one group entity, Kalptaru Agro India Ltd, asking it to wind up all collective investment schemes and refund the money collected from investors in one month. Unfortunately public memory is very short and such fraudulent CIS schemes firms almost always get good patronage. Now govt. agencies would soon start its investigations into the activities of this group. M/s KBCL India Ltd. invited contributions to invest in land and allotted land to investors. The investors were given an option to withdraw the delivery of land as well as the returns promised. In other words, this company is conducting CIS activities under the garb of real estate operations. This company raises deposits in the disguise of advances for unknown real estate projects. Company offers many options: Fixed deposits, Monthly investment schemes, Single investment schemes, recurring deposits etc.Promoters of the company are allegedly siphoning the monies collected and are using a sales network comprising local persons who are offered hefty commissions, in a manner similar to Ponzi schemes. KBCL India Ltd is involve in illegal raising of deposits, especially in rural and semi-urban areas and duping of the gullible public with a promise of huge returns. The collapse of the Saradha Group in West Bengal has already claimed two lives—an agent and a depositor killed themselves towards the end of last week. The real estate projects appear to have emerged as favourite for entities operating such fraudulent schemes. Kalptaru group is planted with the money collected from hard earned money of poor and common people of India by promising huge returns in the projects proposed to be developed from the scratch through public money. It isn’t immediately known how much money the Kalptaru Group owes its depositors. According to some estimates, including by an working employee of the group, it could run into thousands of crores of rupees. We request to the government’s immediate intervention to recover money from this group and take the steps necessary to seize all assets of the Kalptaru Group. There appears to be a need to restrain the company from raising further money from investors as well as launching new schemes and direct this company to not dispose any of the properties or delineate assets of the scheme. Govt. should pass an order to wind up its existing collective investment schemes (CIS) and ban the company from diverting funds kept in its custody or deposited in any bank with immediate effect, as it had no Sebi registration. We request Sebi to issue an order against Kalptaru Group to stop taking “earnest money in equated monthly installments from the public for the purchase of land, because sthe market regulator viewed it as a collective investment scheme (CIS). The firm did not have the necessary license to pursue such a business. In fact, going by available evidence, Suspecting investor frauds in the projects being launched by Kalptaru Buildtech Corporation Ltd, capital markets regulator Sebi needs to probe Kalptaru Group for possible violations of Collective Investment Scheme regulations. Company lure investors into putting in their money for purchase of land and thereafter for development of projects and promise them huge returns at a later stage.
Incidentally, similar order against one entity of this group was issued in 2003 as well, but orders were not complied with so the regulator should take fresh and strict action against this whole group.