Cracking the whip on unauthorised investment schemes by an agricultural investment platform, Sebi has barred Farm Tech Silo LLP, also known as Growpital, related entities and their directors from collecting money from investors and prohibited them from the securities market till further directions.
Also, they have been 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.
These directions will be in force until further orders, the Securities and Exchange Board of India (Sebi) said in an interim order passed on Monday.
In its probe, the regulator found that Growpital is a platform that is offering 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 the 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 activities of Growpital...Show that prima facie a CIS is being operated. However, no material is available on record to indicate that any of the entities involved in the instant arrangement has formed a Collective Investment Management Company that has obtained a certificate under CIS Regulation,” Sebi said.
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.
