Libra Plantations, floated in 1993, came up with 18 different `No Risk' plantation schemes promising handsome returns on investments for a maturity period of 15 years and above. According to reports, over the last five years, the company managed to collect around Rs 16 crore on its schemes, but couldn't release the agreed returns. On the other hand, the authorities have received complaints from 261 investors who allege being swindled of an amount as high as Rs 125 crore by Libra Plantations.

The matter is being further investigated by a team comprising AssistantCommissioner of Police, Madhukar Ghorpade, Deputy Commissioner of Police, A D Shinde and Assistant Police Inspector Ishwar Shinde.

In a related development, the Investors' Grievances Forum (IGF) has complained to the Securities and Exchange Board of India (SEBI) against three other plantation companies for allegedly trying to mislead investors.

According to IGF Secretary, Shailesh Ghedia, recent newspaper advertisements issued by Enbee Enterprises Ltd, Shivaji Estate, Livestock and Farms Ltd and Pagoda Forests Ltd for their plantation schemes do not abide by SEBI regulations and also violate a recent High Court injunction. On June 8, the Bombay High Court, in response to a petition filed by IGF, had directed SEBI to caution people against Rating 5 companies which attract investors by issuing advertisements in newspapers and magazines. Rating 5 is issued to companies having the highest risk factor and uncertainty.

``Thousands of such discreet companies come up with lucrative schemes under the pretext ofhaving been given Rating 5 by Credit Rating Information Services of India Limited (CRISIL) and Credit Analysis and Research Limited (CARE).

However, they never elaborate on the risk factors,'' says Ghedia. As a result, they make huge monetary gains. But instead of spending the money on the actual project, they use it for non-agricultural purposes, Ghedia alleged. Hoardings advertising the schemes of Pagoda Farms can still be seen outside Dadar railway station, he points out.

Incidentally, the collective fraud by about 3,599 plantation companies registered with the Registrar of Companies in India (RCI) amounts to a whopping Rs 25,000 crore. However, according to Ghedia, only 497 companies exist in SEBI records and these include both plantation and farming companies and resorts. And 47 companies out of these 497 have been given the Rating 5. ``We have been complaining to SEBI for the past one year, but the authorities have failed to even specify the exact number of such companies,'' Ghedia alleges. Theissue is being investigated by a six-member committee appointed by the Union Finance Ministry.

Meanwhile, demanding a rejection of all applications from finance companies which fall under Rating 5, IGF has sought SEBI's intervention to see that such companies return the investors' money. ``IGF representatives and investors concerned will meet SEBI chairman, D R Mehta, and Deputy Chief Minister Gopinath Munde to seek a complete ban on finance such companies," Ghedia informed further.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.