Sebi slaps Rs 20 cr fine on Pancard Clubs, 4 directors for illegally raising funds

The company had failed to comply with Sebi's direction in February 2016 ordering it to refund investors over Rs 7,000 crore, raised through illegal collective investment schemes (CIS). Pancard Clubs had mobilised Rs 7,035 crore from 51,55,516 investors from 2002-03 to 2013-14 through its various holiday schemes..

Capital markets regulator Sebi on Friday slapped a total fine of Rs 20 crore on Pancard Clubs and its four directors for illegally mobilising money from investors through unregistered collective investment schemes (CIS). The firm is a part of Panaromic Group of companies having interest in hospitality, timeshare, travel and tourism and information technology, Sebi noted.

The entities are liable to pay the fine amount jointly and severally, Sebi said in an order. The directors are Manish Kalidas Gandhi, Chandrasen Ganpatrao Bhise, Ramachandrandran Ramakrishnan and Shobha Ratnakar Barde.

Sebi during an investigation found that the firm was carrying out CIS activities under the garb of timeshare business without obtaining requisite approval from the regulator as mandated under Collective Investment Scheme Regulations. Citing Prohibition of Fraudulent and Unfair Trade Practices norms, Sebi said it "prohibits any person from dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and illegal mobilization of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective investment scheme by any person".

For violating market norms, the regulator imposed monetary penalty on the firm and its directors. In the event of failure to pay the fine amount within 45 days, recovery proceedings may be initiated, Securities and Exchange Board of India (Sebi) said.

From information in public domain, Sebi noted that the entities raised over Rs 7,000 crore through unregistered CIS and recovery proceedings have also been initiated against them. The company had failed to comply with Sebi's direction in February 2016 ordering it to refund investors over Rs 7,000 crore, raised through illegal collective investment schemes (CIS).

Pancard Clubs had mobilised Rs 7,035 crore from 51,55,516 investors from 2002-03 to 2013-14 through its various holiday schemes..

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