New Delhi:
A company owned by KD Singh, a Member of Parliament from Mamata Banerjee's Trinamool Congress has been given three months to wind up a scheme through which it collected over Rs 1,000 crore in the last five years from small investors across the country. Every investor is meant to be refunded by Alchemist Infra Realty Limited, part of the gigantic Alchemist Group, of which Mr Singh, 51, is chairman.
On June 21, market regulator Securities and Exchange Board of India or SEBI instructed Alchemist Infra Realty Limited to shut down its "collective investment scheme."
Buying in meant that a farmer like Sushanta Polen from West Bengal in 2009 paid Rs 10,000 for a share in a plot of land in Haryana and a 200 per cent return on his investment in eight years.
The scheme was centred around offering investors a chance to buy a piece of land with others. Alchemist promised to develop the land and sell it on, with supposedly huge returns to the land-owners.
Mr Singh and his party have not commented on the controversy but a statement from Alchemist said that it has never defaulted in any repayment to its investors. It also said that the legal department is studying SEBI's order and "the company will abide by the directions of the law of the land." (
Read Alchemist's statement)
Two months ago, a massive Ponzi scheme run by the Saradha Group in Bengal collapsed, leaving thousands of investors bankrupt. Two MPs from the Trinamool had worked closely with the group's large media section, placing the party in a troubling position.
SEBI investigated Alchemist for over two years asked on an anonymous complaint and ruled that the scheme did not have necessary clearances and was designed to mislead investors. In some cases, the land being offered for sale allegedly did not exist.
SEBI has also said it will ask local police authorities in various states to register criminal cases against the company and its five directors for fraud and cheating.
SEBI has also barred the company and directors from trade in securities market till all money is refunded.
The same Alchemist scheme was investigated last year by the Registration of Companies, which reports to the Ministry of Corporate Affairs after a complaint by CPI leader D Raja to the RBI which was forwarded to the ministry. Alchemist has challenged the enquiry in a court in New Delhi.