Case Overview

This final order emanates from an investigation into Growpital Platform (operated through Farm Silo Tech LLP and associated entities) for the period April 1, 2020, to January 31, 2024. The proceedings were initiated based on investor complaints and a preliminary examination that led to an ex-parte interim order on January 29, 2024, which was subsequently confirmed on April 26, 2024.

The investigation revealed that Noticee Nos. 1 to 8 (Rituraj Sharma, Krishnna Joshi, Gayatri Rinwa, Yotta Agro Venture Pvt Ltd, Farm Silo Tech LLP, ZF Project 1 LLP, ZF Project 2 LLP, and ZF Project 3 LLP) collectively operated an unregistered Collective Investment Scheme (CIS) through the website www.growpital.com. They raised ₹192.88 crore from 5208 unique investors by offering 18 different investment plans with promised returns ranging from 10% to 18.5% per annum. Investors were onboarded as partners in three ZF LLPs through executed consent letters and LLP agreements that allocated "units" to them.

The scheme violated Section 11AA(2) of the SEBI Act by satisfying all four conditions of a CIS: (1) pooling of investor contributions, (2) investments made with expectation of profits, (3) management of property on behalf of investors, and (4) investors having no day-to-day control. Despite claims of agricultural operations, investigation found that all land lease/ownership agreements were in the name of Yotta Agro or its subsidiary Winsome Tea Plantations, with investors having no legal ownership or control over the purported farm assets.

A layered fund transfer mechanism was uncovered where approximately ₹95.60 crore was routed from ZF LLPs to Yotta through Supplier Entities (Toshan Seeds, MSVO Ventures, Nutrikosh India) and Revenue Entities (Ttoys Bazar, Jaipur Chakki Fresh, Unique Projects, Mateshwari Trading, Vishnu Balaji) without underlying business activities. Transactions showed circular patterns with minimal time lag between receipts and payments, no evidence of actual commodity movement, and invalid GST registrations for some entities.

Final Outcome

The scheme is declared an unregistered CIS and ordered to be wound up. Noticee Nos. 1 to 8 are directed to refund ₹192.88 crore to investors with 12% annual interest from January 29, 2024, until actual refund. They are jointly and severally liable for the refund amount and are restrained from accessing securities markets for 5 years or until complete refund, whichever is later.

Noticee Nos. 9-14 and 17-30 (Supplier and Revenue Entities) are restrained from accessing securities markets for 3 years for aiding and abetting the scheme by acting as conduits for fund transfers without underlying business.

Monetary penalties totaling ₹16.9 crore are imposed:

  • ₹2 crore each on Noticee Nos. 1-8 (₹1 crore under Section 15HA for PFUTP violations and ₹1 crore under Section 15D for CIS violations)
  • ₹50 lakh each on Noticee Nos. 9-14 and 20-30
  • ₹20 lakh each on Noticee Nos. 17-19

SEBI will appoint a Nodal Refund Officer to oversee the refund process using frozen funds (approximately ₹50.14 crore currently impounded), recovery of receivables (₹32.79 crore), and liquidation of assets. Any shortfall will be recovered from personal assets of Noticee Nos. 1-8.

Topics: Collective Investment Scheme, Investor Refund, Agricultural Investment Fraud