"Given the lack of clarity around revenues, the apparently exaggerated claims on the land under cultivation and the deficiencies in submission on fund utilisation and financial projections, the balance of convenience lies in favour of continuance of the restraint against the entities." Amarjeet Singh said.
Markets regulator SEBI said that Farm Tech Silo LLP, also known as Growpital, other related entities and their directors will remain barred from securities markets till the outcome of a probe into collection of money through unauthorised investment schemes.
However, the regulator modified its earlier order and unfroze the bank accounts of agricultural investment platform Growpital's directors Rituraj Sharma, Gayatri Rinwa and Krishna Sharma.
A detailed investigation in the matter is in progress, which may bring out additional acts of omission or commission of the entities, if any, SEBI said, adding that the findings in the extant order are prima facie.
"I, under sections of Collective Investment Schemes (CIS) Regulations, hereby confirm the directions issued vide the interim order, till further orders, subject to the modification that the bank accounts of the individuals namely, Rituraj Sharma, Gayatri Rinwa and Krishna Sharma shall be unfrozen," SEBI's whole-time member Amarjeet Singh said in the latest order on Friday.
Singh said the ban will continue as the "proceedings seek to ensure that the funds that are available with the entities are not misused".
"Given the lack of clarity around revenues, the apparently exaggerated claims on the land under cultivation and the deficiencies in submission on fund utilisation and financial projections, the balance of convenience lies in favour of continuance of the restraint against the entities till the time the proceedings in the present matter are complete."
In an interim order passed in January this year, SEBI had barred Farm Tech Silo LLP (Growpital), related entities and their directors from collecting money from investors and prohibited them from the securities market till further directions.
Also, they were directed to "cease and desist" from floating any collective investment scheme (CIS) directly or indirectly in any manner. Additionally, they have been stopped from collecting money from partners or investors through existing schemes.
In its probe, SEBI found that Growpital offered various investment plans to the public in the agricultural sector. It also claimed to offer fixed tax-free profits in the range of 11 to 14 per cent through investments in the agriculture sector.
When an investor invests through Growpital platform, the investor becomes a partner in a Limited Liability Partnership (LLP) and the amount invested is treated as capital contribution to the LLP. It was revealed that multiple LLPs have been incorporated for this purpose, prefixed with the name of ZF Project -- ZF Project 1 LLP, ZF Project 2 LLP and ZF Project 3 LLP.
As per the bank statement of Growpital, over Rs 184 crore has been mobilised from various sources as of December 31, 2023, SEBI found.
The regulator said the amount of money, prima facie, observed to have been mobilised in the Growpital escrow account of over Rs 184 crore indicates the magnitude of the prospective threat of investors getting lured to the unregistered activities being carried out by the entities.