The Securities and Exchange Board of India (Sebi) on Monday said it will auction assets of Royal Twinkle Star Club Ltd (RTSCL) and Citrus Check Inns Ltd — promoted by the Mirah group — next month, in order to recover funds worth thousands of crores of rupees raised by the companies in the garb of sham ‘timeshare’ holiday plans, or collective investment schemes (CIS).
Over 18 lakh investors lost about Rs 8,000 crore in the holiday package schemes floated by these firms, which promised high returns on their investments. The move comes following the directions of the Supreme Court, Sebi said in a notice Monday. The properties at Alappuzha, Kerala will be auctioned on December 4 at a total reserve price of a little over Rs 19 crore, it added.
In October, the regulator said it will auction properties of RTSCL and Citrus Check Inns at Lower Parel, Lonavala and Bengaluru on November 26 at a total reserve price of over Rs 117 crore. In December 2018, Sebi imposed a penalty of Rs 50 lakh on Citrus Check Inns and its directors for non-compliance with its order, wherein it had barred them from raising funds from the public.
The regulator had received several investor complaints against Citrus alleging that directors of Royal Twinkle are now running their CIS through Citrus.
In August 2015, Sebi imposed a four-year ban on Royal Twinkle and its four directors for illegally raising over Rs 2,656 crore in the garb of sham ‘timeshare’ holiday plans. It also directed the firm and its officials to refund the money along with promised returns to the investors in three months.
It was one of the first cases filed with NCLT Mumbai in 2017, when the Insolvency and Bankruptcy Code was promulgated. However, the case landed at the doorsteps of the Supreme Court.
The audit report revealed that of the Rs 8,245 crore collected through the ponzi schemes, about Rs 2,962 crore was distributed as commission to the agents.