9911796707
TMI Blog2014 (7) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... ding with SEBI, iii. Details of the past and present directors of the company. Details should contain name, address, PAN and contact details (Email/fax/contact no) of the directors, iv. Brochures/offer document pertaining to PCL's schemes/arrangements, v. Copies of application forms that are required to be submitted by investors/applicant to participate in PCL's schemes, vi. Sample copies of the registration letter/allotment letter or any other document issued to the investors who subscribe to PCL's schemes, vii. Sample copies of the agreement letter/contract required to be entered into by investor/applicant under PCL's schemes. viii. Details of the scheme wise and year wise amount mobilized by PCL till date along with the number of investors under the schemes, ix. Details of the scheme wise and year wise amount paid/redeemed by PCL till date along with the number of investors under the schemes, x. Details of scheme wise timeshare availed by the investors/applicants. In case the investors/applicants opted for surrender value instead of timeshare, to provide the details of surrender value redeemed, xi. Certified copy of audited financial statement f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this context, the issue for determination is whether the mobilization of funds by PCL under its schemes fall under the ambit 'collective investment scheme' provided in Section 11AA of the SEBI Act, 1992 (hereinafter referred to as "SEBI Act"). 6. On an examination of the material available on record, it is prima facie observed that: a) PCL (CINU91900MH1997PLC105363) was incorporated on January 24, 1997. It has its registered office at 111-113, Kallandas Udyog Bhavan, near Century Bazar, Prabhadevi, Mumbai- 400 025. Its directors are Mr. Sudhir Shankar Moravekar, Mrs. Shobha Ratnakar Barde, Mrs. Usha Arun Tari, Mr. Manish Kalidas Gandhi, Mr. Chandrasen Ganpatrao Bhise and Mr. Ramachandran Ramakrishnan. b) The main object of PCL as per the MoA, is "to carry on business as proprietors of all types of clubs, gaming rooms, card rooms and billiard rooms, golf club and creating recreation and club facilities and generally as amusement caterers and organisers, promoters, providers and managers of all kinds of entertainments". c) As per the brochure furnished by PCL, vide letter dated October 03, 2013 it is noted that PCL is offering, inter alia, following schemes to general publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al entitlement Room Nights per quarter Current estimated surrender Value per unutilized room nights Rs. 80,000/- (1,000*80) Rs. 34,000/- (425*80) 80 2 Rs. 850 vi. Sunrise Holiday for 5 years (w.e.f. February 05, 2009): Current Average Tariff for one hundred and twenty room nights Offer Price of one hundred and twenty room nights Total entitlement of room nights Entitlement of room nights per months Current Estimated surrender value per unutilized room nights. Rs. 2,40,000/- (2,000*120) Rs. 1,08,000/- (900*120) 120 2 Rs. 1800 * As per the policy of PCL, applicants of abovementioned schemes at (iv) and (v) can "...commence utilising his room night entitlements after 30 days from acceptance of his application by the company. Applicants of abovementioned schemes at (vi) can commence utilising his room night entitlements after 60 days from acceptance of his application by the company. * Applicants of schemes at (iv) and (vi) shall be entitled to utilise a maximum of 2 room nights per month. Applicants of schemes at (v) shall be entitled to utilise a maximum of 2 room nights per quarter. * Out of the monthly/quarterly entitlements, an applicant of schemes at (iv), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the scheme. In the event of non-payment of instalment consistently, the applicant shall be levied a late fee of Rs. 15 per month for each such delayed payment. * The applicant can commence utilising his room night entitlements after 60 days from completion of all the 36 payments towards committed room nights. As per the policy of PCL, an applicant shall be entitled to utilise a maximum of 33% of the total room nights purchased by him in a single financial year. For availing the room nights, at the affiliated destination, applicant shall have to pay exchange fees of Rs. .150 per room nights. 7. For all the eight schemes mentioned above, upon maturity, the applicant may surrender his unutilized room nights and opt for following: i. The applicant may opt for surrender value. The actual surrender value shall be determined by the company at the time of surrender of room nights and shall be paid after the expiry of tenure under the scheme. ii. The applicant may opt to exchange or barter or utilise the products and services of the company or group companies. iii. The applicant may opt to convert his unutilised room nights to the extent of surrender value entitlement into life ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. As per the submission of PCL, with respect to amount mobilised, and number of room nights actually utilised for the financial years 2010-11, 2011-12 and 2012-13 under various schemes is tabulated as under: Financial year 2012-13 (Rs. in Crores) Sl. No Scheme Amount mobilized Total no of applicants room nights sold Room nights utilized % of room nights actually utilised 1 Delight Holiday 327.19 314576 3635525 8326 0.23 2 Dezire Holiday .03 341 416 0 0.00 3 Divine holiday 171.34 488539 1903779 567 0.03 4 New Premium 3.86 639 90880 116 0.13 5 New Regular holiday 24.17 1449 568720 630 0.11 6 New Royal Holiday 85.61 112494 951243 5708 0.60 7 Relax Holiday 577.93 302727 6421506 30545 0.48 8 Sunrise Holidays .73 48 8160 18 0.22 Total 1190.86 1220813 13580229 45910 0.34 Financial year 2011-12 (Rs. in Crores) Sl. No Scheme Amount mobilized Total no of applicants room nights sold Room nights utilized % of room nights actually utilised 1 Delight Holiday 298.30 121795 3314444 1803 0.05 2 Dezire Holiday - - - 3 Divine holiday 146.77 155218 1630778 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment scheme. (2) Any scheme or arrangement made or offered by any person under which,- (i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement; (ii) 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; (iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors; (iv) the investors do not have day to day control over the management and operation of the scheme or arrangement." 16. In the context of abovementioned Section 11 AA of the SEBI Act, the "Holiday Plans" offered by PCL, is examined as under: i. The contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement. PCL has launched investment schemes in the nature of Holidays Plans, which are offered to the public. Holiday Plan Certificates of confirmation are issued to indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors in the said schemes invested on account of the promise of assured returns. Thus, it is clear that the contributions made by investors towards schemes offered by PCL are with the view to receive profits or income. In view of the above, I find that the instant scheme of PCL satisfies the second condition stipulated in section 11AA(2)(ii) of the SEBI Act. iii. The property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors. iv. The investors do not have day to day control over the management and operation of the scheme or arrangement. The money collected from public in the form of investments made in the various Holiday Plans of PCL are purportedly used by PCL for the purpose of the Plans. It is mentioned, in clause 16 of the brochure/offer document of the schemes that PCL "reserves the right to modify/alter/amend/revoke the benefits/privileges and or the terms and conditions contained herein in whole or in part at its sole discretion or according to the prevailing market conditions/cost factors. PCL takes decisions regarding the management and use of the money collected from investors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred to as "CIS Regulations") also prohibits carrying on CIS activities without obtaining registration from SEBI. 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. In this regard, I note that PCL has not obtained any certificate of registration under the CIS Regulations for its fund mobilizing activity from the public, under its schemes/Holiday Plans as aforesaid. 20. It is noted that PCL was advised to respond to the preliminary enquiry conducted by SEBI, through SEBI letters dated September 17, 2013 and emails dated March 13, 2014 and April 03, 2014. However, on all these occasions, PCL delayed submission of the requisite information and also failed to furnish the scheme wise list of investors and their contact numbers and addresses as sought by SEBI. In these circumstances, I find that reasonable opportunity has been afforded to PCL to respond to SEBI. When considered in the context of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the properties/assets obtained directly or indirectly through money raised by PCL; * not to divert any funds raised from public at large, kept in bank account(s) and/or in the custody of PCL or group companies or promoters or LLPs or Proprietary concerns or any person directly or indirectly controlled through shareholding or management by PCL ; * to furnish all the information/details sought by SEBI within 15 days from the date of receipt of this order, including, i. Details of amount mobilized and refunded till date, ii. Scheme wise list of investors, investment amount and addresses with contact numbers, if any. iii. Details of agents along with address, money mobilized and commission paid 23. The above directions shall take effect immediately and shall be in force until further orders. 24. This Order is without prejudice to the right of SEBI to take any other action that is deemed fit to be initiated against PCL and its Directors in accordance with law. 25. The prima facie observations contained in this Order are made on the basis of the material available on record. In this context, PCL and its abovementioned Directors may, within 21 days from the date of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
