Collective investment scheme test applied to holiday plans, with interim restraints continued to protect investors and assets.

SEBI treated the company's holiday plans and fund mobilisation model as prima facie satisfying the statutory indicia of a collective investment scheme, relying on the scale of public fund collection, incomplete disclosure, substantial commissions, related-party loans and advances, and the scheme's overall structure. Objections based on absence of urgency, non-supply of complaints, alleged timeshare character, and lack of a securities-market nexus were rejected because the statutory test turns on the nature of the scheme, not on whether a traditional security is issued. Later material did not displace the prima facie view, so the interim restraints were confirmed and continued to protect investors and prevent dissipation of assets.

---

---

Issues: Whether the holiday plans and fund mobilisation activities of the company constituted a collective investment scheme and, if so, whether the interim restraints issued earlier should be confirmed and continued.

Analysis: The materials on record, including the company's own disclosures, showed large-scale mobilisation of public funds, incomplete disclosure at the investigation stage, substantial commissions, related-party loans and advances, and a business model that prima facie satisfied the statutory indicia of a collective investment scheme. The earlier objections regarding absence of urgency, non-supply of complaints, alleged timeshare character of the business, and alleged lack of securities-market nexus were rejected on the ground that the statutory test under the SEBI Act turns on the nature of the scheme and not on whether a traditional security is issued. The later information furnished after the interim order did not dislodge the prima facie view, and continuation of restraints was considered necessary to protect investors and prevent dissipation of assets.

Conclusion: The company's activities were treated as prima facie falling within a collective investment scheme, and the interim directions were confirmed and continued against the company and its directors.

---