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Five-year ban on Suman Motels

Mumbai, Oct. 1 (PTI): The Securities and Exchange Board of India (Sebi) has barred Suman Motels and its officials from accessing capital market for a period of five years.

Nine directors, including chairman Sheikh Mukhtar Hussain and managing director Surendra Khandhar, have been prohibited from operating in the capital market in any manner for five years from the September 27 order.

The market regulator said Suman Motels had failed to comply with its July 19 decree directing the company to refund money collected under the collective investment schemes with returns due to investors as per the terms of the offer within a period of one month. Suman Motels, in its reply sent on August 13, offered repayments over 15-36 months through three proposals.

According to Sebi, investors would have been paid their money over the next 15 months, 24 months or 36 months from fresh infusion of funds by other firms, selling of assets and future earnings. Such proposals, Sebi said, have been made in the past also. “The company has been given the chance to repay investors, but it only pays lip-service to its commitments.” “I am once again constrained to take a view, on the basis of the facts of the case, that the company is not serious about fulfiling its promises and making repayments,” Sebi chairman G. N. Bajpai said in his order.

Making it clear that that this order would not come in the way of Suman Motels’ repayment, Bajpai said the fact remains that the company has failed to comply with orders and violated provisions of Sebi Act, 1992 so far.

The company and some of its officials have been prohibited under Section 11B read with Section 4(3) of the Sebi Act to access the markets, Sebi said. Other directors in the dock are Bharti Khandhar, Praful Khandhar, Javed Akhtar, Vijay S. Kumar, Anil Kadakia, Vinod Mistry and Srikant Chitnis.

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