SEBI, the market regulator in India, has announced an auction of Saradha Group properties in West Bengal with a reserve price of over Rs 3 crore to recover funds raised through alleged illicit schemes. The auction, scheduled for October 17, 2023, follows a directive from the Calcutta High Court and aims to compensate depositors who suffered losses when the Saradha Group collapsed in 2013 after raising around Rs 4,000 crore from 1.7 million investors. Potential bidders are required to conduct independent due diligence, and the successful bidder will bear transfer charges and taxes associated with the property.
The Securities and Exchange Board of India (SEBI) has announced its intention to auction properties belonging to the Saradha Group of companies next month, setting a reserve price of over Rs 3 crore. This move is part of SEBI's efforts to recover funds raised by the Saradha Group through alleged illicit schemes that targeted the public.
The properties slated for auction are located in West Bengal, and SEBI has specified that the auction will take place between 11 am and 1 pm on October 17. The reserve price for these properties has been fixed at Rs 3.68 crore.
To facilitate this auction process, SEBI has enlisted the assistance of Quikr Realty and appointed C1 India as the e-auction provider. This decision follows a directive from the Calcutta High Court in June 2022, instructing SEBI to proceed with the auction of Saradha Group of Companies' properties.
The Saradha Group, a conglomerate comprising over 239 private companies, allegedly operated chit-fund schemes across West Bengal, Assam, and Odisha. They managed to raise a substantial sum of approximately Rs 4,000 crore from around 1.7 million depositors before facing a collapse in April 2013.
SEBI's notice regarding the auction emphasizes that potential bidders must conduct their independent investigations into any encumbrances, litigations, attachments, or acquisition liabilities associated with the properties to be auctioned. This requirement ensures that bidders are well-informed about the properties' legal and financial status before participating in the auction.
Furthermore, SEBI has specified that the purchaser must participate in the e-auction personally, with no third-party agents or representatives allowed to intervene on their behalf. This stipulation aims to ensure transparency and fairness in the auction process.
In addition to the property's bid amount, the successful bidder will be responsible for covering any charges or fees associated with transferring the property into their name. Furthermore, all applicable taxes will be the responsibility of the purchaser, ensuring a clear understanding of the financial obligations that come with acquiring these properties.
This auction represents a significant step in SEBI's ongoing efforts to recover funds for the benefit of the investors who were affected by the Saradha Group's alleged fraudulent activities. It is also a demonstration of the regulator's commitment to taking legal action against entities involved in financial wrongdoing.
The Saradha Group's case serves as a cautionary tale for the financial industry, highlighting the importance of robust regulatory oversight and the need for investors to exercise caution when approached with investment opportunities that promise unrealistically high returns. SEBI's actions in this matter send a strong message that fraudulent financial activities will not go unpunished, and measures will be taken to protect the interests of investors and the integrity of the financial markets.
As the auction date approaches, interested parties will be closely monitoring the proceedings, and it remains to be seen who the successful bidders will be and how the recovered funds will be utilized to compensate the affected depositors.
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