Despite SEBI ban, Mohali builders continue to offer assured returns

MOHALI: Even though the Securities and Exchange Board of India (SEBI) in November 2018 declared that luring people to invest in residential and commercial projects in lieu of assured returns was “fraud and illegal”, several builders in Mohali district, especially in Zirakpur, are still offering the scheme in the absence of supervision.

At present, there are around 10 builders in the district who offer the scheme of assured 10% to 12% per month returns on investment. SEBI’s guidelines deem these schemes illegal and warn investors against falling prey to them, encouraging them to report such incidents to the designated authority.

After a rift developed among the partners of Chandigarh Citi Center (CCC), the biggest commercial property project in Zirakpur, it had come to light that they had been offering 12% monthly return to the investors. Later, the builders promised the investors physical possession of the properties and stopped paying them returns, after which the investors accused them of cheating and not fulfilling promises made at the time of investment.

CCC managing director Tejpal Gupta said, “We are still giving what we promised them, but could not give them since past four months as we don’t have funds due to lockdown due to Covid-19.” On being questioned about the SEBI ban, he refused to comment on the issue.

Another popular builder in Zirakpur, on the condition of anonymity, said, “Since we have promised it to the investors, we are trying to provide (returns), but for the past several months, we could not pay them due to financial crisis.”

Pramod Kumar Sharma, general secretary, Aero Homes Residents Welfare Association, Zirakpur, said, “Our builder also cheated around 245 allottees in the name of assured returns. The project was launched in 2011 and he assured returns of 12% every month, but stopped after he offered possession of the incomplete project. Now, the builder is absconding after more than 50 cases were registered against him.”

A senior official of the Zirakpur civic body said, “It is a well-oiled nexus. Some builders launch the project, assure allottees they will be paid returns till they get possession, and without completing the project, take completion certificates in connivance with MC officials and issue them to the allottees.”

Navreet Singh Kang, chairperson of Punjab Real Estate Regulatory Authority, said, “SEBI has banned (the scheme] but RERA has no specific provision regarding it. Our Act specifically does not bar it and violations are clearly defined in the Act.”

Sebi deputy general said, “We have not received any complaint, but once we do, action will be taken.”

AT PRESENT, AROUND 10 BUILDERS IN THE DISTRICT OFFER THE SCHEME, WHICH SEBI HAS CALLED ‘FRAUD AND ILLEGAL’