Goats as investment cash cows; Sebi smells foul play

A company promising hefty returns on investments made for rearing goats has come under

RELATED ARTICLES

the scanner of market regulator Sebi and action may be initiated against it as early as next week.

Claiming to have large goat-rearing farms in northern parts of the country, Beetal Livestock & Farm (P) Ltd had solicited investments from the public with a promise of 2 per cent monthly returns, and doubling of money in 3-4 years.

Suspecting an unregistered Collective Investment Scheme (CIS) being run to milk investors, the Securities and Exchange Board of India (Sebi) served show-cause notices to the company and its four directors, but were returned undelivered.

Consequently, Sebi has now issued a public notice asking the company and its four directors to collect the show-cause notices by November 10, failing which the regulator has warned to begin ex-parte proceedings against them.

Sebi regulates CIS, which involves pooling in of money from multiple investors for a specific objective.

The company, which was not registered as CIS entity with Sebi, had solicited investments in the goat-rearing business through newspaper advertisements a couple of years ago.

The business model involved paying a few thousands of rupees to become owner of a goat, to be reared by Beetal.

Investors were told that as each goat gives birth to four kids a year, the new goats would be sold to other investors -- giving up to four-fold appreciation in the first year itself. The investments could give manifold returns in subsequent years, said Beetal, with each of the four new goats giving birth to 3-4 kids the following years.

Suspecting a typical ponzi scheme in the name of goat farming, Sebi began enquiry into the matter following several complaints received by it.

However, the show-cause notices served by Sebi to the company and is directors remained undelivered, giving rise to suspicion that the persons involved with the scheme might have fled away.

"SCN (Show-Cause Notice) dated May 10, 2012 and reminder dated June 21, 2012 issued to the noticees through speed post returned undelivered and/or were not responded to," Sebi said in a public notice dated November 1.

It further warned that Sebi would proceed ex-parte on the basis of available records, if the company and its directors do not collect their show-cause notices within 10 days.

Sebi has recently asked the government to come out with a separate set of norms and an independent regulator for collective investment schemes, as loopholes in existing regulations lead to many unscrupulous entities defrauding gullible investors and going scot-free.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • 49 per cent FDI in defence should pave the way for modernisation

    There is one industrial sector in India that has been kept out of the purview of the normal cycle of investment and production — defence.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Welfare must be humanitarian not political

We are a very political people. We politicise and corrupt ...

Purnendu Ghosh

How to distinguish a need from a want?

The day when the annual budget is announced is one ...

Shona Adhikari

Decades apart, yet a common ground in fine art

Today’s column is about two artists born many decades apart, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture