Sebi: Puravankara Project real estate scheme does not fall under CIS category
According to the Securities and Exchange Board of India (Sebi), Puravankara Projects commercial real estate scheme does not fall under the collective investment scheme (CIS) category because the scheme did not involve any offer for pooling of funds for assured returns.
Sebi’s viewpoint on the commercial real estate scheme floated by Puravankara Projects comes in response to a clarification which the bigwig realty firm had sought on the proposed scheme.
Sebi said that the implementation of Puravankara’s proposal to sell commercial office space involved two stages. In the first stage, the title of identified salebale unit will be developed and conveyed to the purchaser; while the second stage will involve primary leasing of identified and saleable unit from all purchasers to Puravankara, along with a further sub-leasing of these units jointly – along with co-owners – to potential tenants, with the company being the lease manager.
The rent accruing from the collectively-leased units will be transferred proportionately to all purchasers.
About Puravankara’s commercial real estate scheme, Sebi elaborated that the first stage of the transaction underscores a standard real estate transaction involving a separate individual and the developer.
The second stage, as per Sebi, involves the sale of immovable property only by a registered instrument, as well as an agreement of sale which would not create any interest or charge on its subject matter.
As such, Sebi said, in an informal guidance, that the Puravankara’s commercial real estate scheme cannot be termed CIS.
Source – Financial Chronicle
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