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Capital market regulator SEBI has barred Religare Arts Investment Management and Religare Arts Initiative from collecting money from investors or carrying out collective investment schemes. The Religare Art Fund, a step-down subsidiary of Religare Enterprises, was raised in 2007-08 to invest in the art market during its boom period. The object of the three-year scheme had been to hold, invest and trade in artwork. When the scheme closed, it had 43 beneficiaries who had contributed a total of ₹11.49 crore to the scheme.
However, SEBI found that the fund was functioning as an unregistered collective investment scheme. Religare had voluntarily offered the initial contribution amount to all its investors at the end of the term of the Religare Art Fund in the year 2011. Of the total 42 investors, 38 had responded to Religare’s offer and transferred their contributions to Religare Venture Capital. However, Religare hasn’t returned the principal amount of the remaining four investors.
SEBI’s order on Thursday mandates Religare Arts Investment Management to refund the money due to the four investors with interest within three months, failing which, the company would be barred from the securities market.
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