Trouble brews

Mumbai, Jan. 8: The Securities and Exchange Board of India today initiated attachment proceedings against MPS Greenery Developers Ltd for failing to repay Rs 1,520 crore to investors in compliance with a recovery order issued on October 25 last year.

The capital market regulator barred and restrained MPS Greenery Developers from transferring any shares it held in group company MPS Food Products or creating any encumbrance. It was also barred from receiving any dividend from MPS Food Products.

MPS Food Products was also prohibited and restrained from transferring any of its shares standing in the name of MPS Greenery Developers, creating any encumbrance of making any payment of any dividend on those shares.

Wednesday’s attachment notice was issued by D.V. Sekhar, recovery officer and deputy legal adviser at Sebi.

MPS Greenery had come under Sebi’s scanner in 2012.

On December 6 that year, the market regulator passed an order asking the promoters of MPS Greenery to stop collecting money under their pyramid investment scheme and to refund all money to depositors.

It said that as of September 30, 2012, the firm had collected around Rs 1,520 crore without “any valid registration and moreover, ignoring the specific prohibition issued by Sebi not to raise any money in any new or existing schemes”.

Sebi member Prashant Saran said the firm had not only disregarded Sebi’s orders but had also attracted an adverse notice from rating agency ICRA, which had downgraded its collective investment schemes’ rating to junk grade at CS5, which is considered “to have very high risks and are ‘extremely speculative’.”