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Auction order in funds case

Calcutta, July 3: Calcutta High Court today directed Sebi to auction two buildings owned by the Tower Group, a deposit-mobilising entity, and distribute the proceeds among duped depositors and debenture holders.

This is the first time the high court has ordered the market regulator to liquidate assets of a deposit-mobilising company and refund investors.

“Sebi is directed to sell off the main office building of the Tower Group at Ananda Palit Road in Calcutta and a hotel at Egra in East Midnapore by July 29 and refund the money of petitioner depositors and debenture holders from the sales proceeds,” Justice Dipankar Dutta said today.

Justice Dutta directed Sebi to find out the value of the assets and the amount to be refunded to the depositors.

A lawyer said the order was “significant” also because the court had asked Sebi to liquidate assets at a time the state government has given the same responsibility to the Justice Shyamal Sen commission.

The Tower Group features on the list of 73 deposit-mobilising companies that the Union corporate affairs ministry had prepared after the Saradha default last year.

Tower Infotech, one of the group’s companies, had mobilised deposits from the public but had failed to repay them upon maturity of the schemes, according to the petition by 70-odd investors and debenture holders. The Tower Group is owned by Ramendu Chattopadhyay and is engaged in the information technology, hospitality, solar two-wheeler and media sectors.

The depositors and debenture holders had moved the high court in April this year, accusing the Tower Group of duping them after promising high returns on daily deposit schemes and real estate investments.

Last November, Sebi had moved an application before a division bench of Calcutta High Court headed by Justice Asim Banerjee, challenging the Bengal government’s decision to set up a commission to compensate duped depositors of the Saradha Group and other deposit-mobilising entities.

The division bench had turned down Sebi’s application, in which the market watchdog had said liquidation of assets was its prerogative.

During the hearing of the case lodged by the duped depositors of Tower, the counsel appearing on behalf of the group had told the court that Tower Infotech could refund all depositors and debenture holders if it was allowed to sell its assets.