Growpital case: Sebi to refund money directly to investors for first time

Mumbai: The Securities and Exchange Board of India(Sebi) will refund money directly to investors for the first time, with the capital markets regulator ordering the appointment of a dedicated nodal officer to oversee repayment of funds collected through the Growpital platform.

The regulator found that Growpital and its associated entities had raised ₹192.88 crore from 5,208 investors through three LLPs (Limited Liability Partnerships).

Sebi concluded that the entities were running an unregistered collective investment scheme in violation of securities laws.


So far, Sebi has refunded money to investors in cases where the Supreme Court had appointed monitoring committees, headed by a former Supreme Court judge, such as in the Sahara case.

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The regulator has ordered that the money collected under the schemes and still outstanding be refunded to investors, along with interest at 12% a year from January 29, 2024-the date of Sebi's interim order-until the date of refund.

The first round of refunds will be made from funds lying in Growpital's escrow account and with Cashfree Payments India.Growpital used Cashfree as its payment aggregator for collecting money from investors.The money collected through Cashfree was pooled in Growpital's escrow account and subsequently transferred to the bank accounts of three ZF LLPs.

"The worst impact of this whole scheme has been faced by numerous innocent investors of Growpital who were gullible enough to have fallen prey to the tall claims of entities through Growpital and who invested their hard-earned money in the hope of getting assured profits/returns through the purported agricultural operations," Sebi whole time member Kamlesh Varshney said in his 166- page order.

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The regulator said refunds will be made proportionately based on the amount outstanding to each investor through direct bank transfer. Sebi will verify the investor details with Cashfree or the concerned banks. The verified list will be hosted on Sebi's website and published in a national daily in English and Hindi.

Sebi has directed that the collective investment scheme launched by the entities be wound up. The regulator has also barred the entities and their key persons from collecting further money or launching or carrying out any CIS. Rituraj Sharma, Krishnna Joshi, Gayatri Rinwa, Yotta Agro Venture, Farm Silo Tech LLP and the three ZF Project LLPs have been restrained from accessing the securities market for five years.