Potatoes are grown across 130 countries and form the largest non-cereal food crop have in large per capita measures in few of the Eastern European and South American countries. India is the world's third-biggest manufacturer of the crop and is estimated sto have about 25 million tonnes each year. Calcutta-established Sumangal Industries Limited introduced a high yield investment initiative underneath the logo of the Flexi-Potato Purchase Scheme.
Marketplace regulator, Securities and Exchange Board of India (SEBI), took exception to the company's collecting uncollateralized deposits from the members of the public despite any enrollment, and issued restrictive orders. This case places the facts underlying the offering in perspective and runs a micro economic analysis to assess the strengths of the company proposition.
The statistical analyses reveal the volatility and predictability of seasonal pricing patterns the company attempts to manipulate may not continue past the short-term. Additionally, the early success of the scheme is likely to bring entry into the section, therefore compressing arbitrage margins and improving business process costs. This case supports policy makers to sufficiently educate potential investors as a means to empower them to make resource allocation decisions that are sensible and also lays out facts regarding exogenous influences on the neighborhood potato marketplace. The judgments of the case might be implemented beyond West Bengal, and beyond India, to other agricultural produce and pyramidal investment schemes, qualified by local conditions.
PUBLICATION DATE: February 19, 2014 PRODUCT #: W13619-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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