SUMAN MOTELS LIMITED

The Company, neither applied for registration under SEBI (Collective Investment Schemes) Regulations, 1999, nor took steps for winding up of the scheme(s) and making payment to the investors in the manner provided under the said Regulations. 

A Show Cause Notice was issued to the Company on May 12, 2000 asking it to show cause as to why the action should be not initiated against it for the aforesaid violations/non-compliance. The Company in its reply dated May 16, 2000 informed SEBI that Information Memorandum has been circulated to its members on 28-02-2000 and it has taken further steps for realising the assets and for making payments to the investors. 

As requested, the Company was granted several personal hearings before Chairman, SEBI. During the said hearings it was submitted that the Company is taking all the steps for the repayment to the investors and sought further time for repayment to the investors. It was noted that the Company has made contradictory statements regarding the number of its Collective Investment Scheme (s), number of investors therein and amounts raised under its Collective Investment Scheme (s). At every occasion, the representatives of the Company have assured SEBI that it would repay the investors and would take every possible action in this regard. However, the conduct of the Company is such that it wants to pay lip service to what is committed to SEBI. The Company has failed to wind up its Collective Investment Scheme (s) to make repayments to its investors and submit the "Winding Up and Repayment Report" to SEBI, despite its confirmation to do so. 

In view of the above, in his order, passed on July 19, 2002, Chairman, SEBI has directed the Company to refund the money collected under its Collective Investment Scheme (s) with returns which is due to the investors as per the terms of the offer within a period of one month from the date of the Order failing which the following actions would follow:

1. Initiation of prosecution under section 24 of SEBI Act, 1992.

2. The Company and its concerned officials would be debarred from operating in the capital market and from accessing the capital market for a period of 5 years.

3. Reference to the state governments / local police to register civil /criminal cases against the Company/its concerned officials for the offences of fraud, cheating, criminal breach of trust, dishonest misappropriation of public funds.

4. Reference to the Department of Company affairs to initiate the process of winding up of the Company.