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Beware of plantation companies, cautions SEBI

The Securities and Exchange Board of India has once again advised investors not to get misled by advertisements of plantation companies offering attractive returns and promises.

The regulatory board stated that it has, from time to time, been advising investors to exercise great deal of caution before investing in any high- risk plantation scheme. Many investors have been approaching the SEBI for advice on the financial health of individual plantation companies.

The SEBI has firmly stated that no plantation company has received any registration from it till date as the regulations for plantation companies are yet to be notified.

The regulatory board has said that it has limited information about the schemes floated by these companies and is not in a position to give any advice on their financial health.

The audit of many of these entities has revealed an unsatisfactory state of financial health.

The SEBI announced that no plantation company can raise any funds without obtaining a rating from one of the four accredited rating agencies and added that the SEBI has received information about ratings from 27 plantation companies and their names and ratings obtained by them.

The SEBI advised investors to verify the credentials of the person floating such schemes, check if the projects scheme have been appraised by any credible agency, understand the implications of the rating and take all precautions before making any investments in these schemes.

The SEBI also advised members of the public to forward the names and addresses of companies that are mobilising funds or inviting subscription without obtaining a rating for their schemes.

UNI