New Delhi: SEBI has moved the Supreme Court seeking transfer of petitions, pending before different high courts that challenge its regulatory powers under SEBI regulations 1999.
A bench headed by Justice H K Sema after preliminary arguments on Friday deferred the hearing on the matter.
According to the market regulator, the Central government had in 1997 declared that the entities issuing agro-bonds and plantation-bonds should be treated as collective investment schemes and thus would fall under the provisions of Section 11 (2) of the SEBI Act 1992.
SEBI had sought transfer of the petitions from the Madhya Pradesh High Court and the Gujarat High Court to the Apex Court on the grounds that these involved similar questions relating to the vires of the SEBI Act 1992 and SEBI regulations 1999.
SEBI further stated that it had after ordering audits in such 35 companies had found that these companies had offered high unrealistic tax-free returns without any basis just to woo investors and diverted the collected funds to unrelated activities without any security.
SEBI counsels contended that the regulator had received number of complaints across the country informing that the cheques issued by various CIS entities had bounced and a number of companies had vanished.
"It is apparent that the respondent companies are not conducting their affairs in the interests of the investors from whom they are collecting their funds by promising them highly inflated unrealistic returns. It is, therefore, incumbent that the said petitions be transfered to this court," PTI quoted SEBI’s transfer petition.
(With agency inputs)
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