| The
unsafe nature of Investments in the plantation
companies has been talked about a lot often.
But the fact remains that these companies
have managed to mobilise funds amounting
to thousands of crores of rupees. All these
companis lured investors thru' long-term
investments by assigning teak wood trees
and cash crop plantations. Funds were mobilised
more than 100 times their paid up share
capital. According to a report, the total
number of trees planted were less than one-fifth
of the total tree units sold to the public
through these schemes.
It was only after the collapse
of Anubhav Plantations, a high profile plantation
company which has gathered thousands of
crores-that the regulatory bodies viz. SEBI
and RBI clamped a ban on companies restraining
them from selling, disposing of and/or alienating
their immovable property or parting with
the same.
It is estimated that more
than 4500 plantation comanies have garnered
more than Rs. 25,000 crores from the market.
However, and ironically, SEBI has clarified
that they have only limited information
about the schemes floated by these companies
and is not in any position to give any advice
on their financial health. SEBI has also
made it mandatory for all Plantation Companies
to obtain a credit rating before raising
funds for their schemes.
All Plantation Companies
rated so far have been found to be below
investment grade ( Rating CS 5 ) which implies
that there is a very high risk perception
for the investors contemplating investment
in these schemes.
The modus operandi of all
these Plantation Companies has been similar-almost
to the ' T '. Promise huge returns on investments,
bring out a number of schemes (all Collective
Investment Schemes), initially repay few
investors from the new investments flowing
in. It was only when the prospect of bulk
outflow came-that crunch time arrived and
companies collapsed. |
