₹2,722 crore mobilized through unregistered CIS by Citrus Check Inns Limited

It details the procedural history, including Supreme Court interventions, and the adjudication of penalties against the company and its directors.

Who it concerns: 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).

What SEBI found or ordered

• SEBI found that Citrus mobilized approximately ₹2,722 crore through 7 holiday plans that constituted an unregistered Collective Investment Scheme (CIS).
• SEBI alleged that the company and its directors violated Section 12(1B) of the SEBI Act and Regulation 4(2)(t) of the PFUTP Regulations by engaging in fraudulent or unfair trade practices.
• The Adjudicating Officer decided the matter ex-parte regarding Noticee no.5 (Narayan Shivram Kotnis) because he neither filed a reply to the Show Cause Notice nor appeared for the hearing.
• Noticees no.2, 3, and 4 submitted replies arguing that the proceedings were delayed and redundant due to existing Supreme Court orders for asset attachment and investor refunds.
• The order notes that 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.

Also in the document

• The case involved a complex legal history where the Supreme Court set aside a Securities Appellate Tribunal (SAT) order in 2016 and later stayed Insolvency and Bankruptcy Code (IBC) proceedings to allow SEBI to investigate.
• The total amount mobilized through the alleged unregistered schemes was approximately ₹2,722 crore.
• The Supreme Court appointed Justice J.P. Devadhar as the head of the Sale cum Monitoring Committee (SMC) in 2019 to oversee asset sales and refunds.
• The adjudication proceedings were initiated after the Supreme Court permitted SEBI to proceed in accordance with law via an order dated August 08, 2024.