SEBI adjudicates ₹2722 crore Citrus Check Inns fraud case

This order addresses allegations that Citrus Check Inns Limited operated an unregistered Collective Investment Scheme (CIS) and engaged in fraudulent trade practices, resulting in the mobilization of approximately ₹2,722 crore from investors. It details the procedural history, including Supreme Court interventions, and the adjudication process against the company and its directors.

Citrus Check Inns Limited (Noticee no.1), Omprakash Basantlal Goenka (Noticee no.2), Prakash Ganpat Utekar (Noticee no.3), Venkatraman Natarajan (Noticee no.4), and Narayan Shivram Kotnis (Noticee no.5).

• SEBI found that Citrus mobilized approximately ₹2,722 crore through 7 holiday plans that met the definition of a Collective Investment Scheme (CIS).
• SEBI alleged that Citrus operated this CIS without obtaining the required certificate of registration under Section 12(1B) of the SEBI Act.
• SEBI alleged that the Noticees engaged in fraudulent or unfair trade practices under Regulation 4(2)(t) of the PFUTP Regulations, 2003.
• The Adjudicating Officer decided the matter ex-parte regarding Noticee no.5 (Narayan Shivram Kotnis) as he did not file a reply or appear for the hearing.
• Noticees no.2, 3, and 4 submitted replies arguing that the proceedings were delayed and redundant due to existing Supreme Court directions for asset attachment and investor refunds.
• The Supreme Court had previously directed the constitution of a Sale cum Monitoring Committee (SMC) to oversee the sale of Citrus's properties and the refund process.

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