June 19: Capital market regulator Sebi has ordered Rose Valley Real Estates and Construction Ltd to refund to investors money collected through its Ashirbad scheme within three months and barred the promoters of the Bengal-based entity from the securities market.

Sebi has also warned the company of attachment and recovery proceedings. The market regulator made it clear that if Rose Valley failed to refund the money, Sebi would ask the Bengal government and police to register a civil or a criminal case against the company for fraud, cheating, criminal breach of trust and misappropriation of public funds.

The promoters and directors of the company are Gautam Kundu, Shibamoy Dutta, Ram Lal Goswami, Abir Kundu and Ashok Kumar Saha.

A Sebi probe has found that Rose Valley Real Estates and Construction Ltd had been running a “collective investment scheme” without necessary approvals. The company had allegedly raised funds from the public on the pretext of selling land under the Ashirbad scheme.

Sebi, in an order dated June 18, asked the promoters and directors of Rose Valley Real Estates and Construction Ltd “to wind up its scheme and refund the money collected by it under the scheme with returns which are due to the investors as per the terms of offer within a period of three months from the date of this order and submit a winding up and repayment report to Sebi”.

Through an interim order in 2011, Sebi had barred Rose Valley Real Estates from raising funds.

In its final order, the market regulator said the money collected by the company had increased to Rs 2,016 crore as on March 31, 2011, from Rs 1,358 crore a year before that.

Countering Sebi’s claim, Rose Valley chairman Gautam Kundu said the Ashirbad scheme had been discontinued from December 31, 2010. “Over the past three years, we have paid back money to the depositors and the outstanding as of now is just Rs 175 crore. We will return the amount in the next three months,” he said.

Gautam Kundu said he would challenge the Sebi order at the Securities and Appellate Tribunal.

Sebi said the company had not provided any documentary evidence to substantiate its claim that it had refunded the money and might have continued to raise cash from the public.

As of March 31 this year, the Rose Valley group has assets worth over Rs 10,000 crore across real estates, hotels, parks and resorts, Gautam Kundu said. “We are not collecting deposits any more. Rose Valley is selling time shares. We have 25 hotels,” he added.