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Shilpa Shetty\'s Satyug Gold Joins \"Gold Rush\". Shilpa Shetty and her entrepreneur husband, Raj Kundra, who launched Satyug Gold early this year, say that they are offering great discounts at affordable prices at their gold bullion and jewellery company
Shilpa Shetty and her entrepreneur husband, Raj Kundra, who launched Satyug Gold early this year, say that they are offering great discounts at affordable prices at their gold bullion and jewellery company, so that they can fulfil people’s dreams. Satyug Gold is offering discounts up to 37% on the purchase of gold bars and coins for those who are willing to pay the entire amount in advance and wait for two to five years to have the gold delivered to them.
Satyug Gold is opening seven stores in the cities of Mumbai, Delhi, Jaipur, Ahmedabad, Pune, Chandigarh and Ludhiana. The company has a co-branding tie-up and trademark license agreement with the Indian Bullion and Jewellers Association, formerly known as the Bombay Bullion Association.
Kundra, who sold pashmina shawls and traded in metals in London before cofounding the Indian Premiere League cricket team, Rajasthan Royals, has a target of selling Rs 1,000 crore worth of gold through Satyug.
In an interview at a posh Bandra-Kurla complex office, Kundra told reporters that Satyug will be guarantor for the delivery of the gold. Under the programme, customers looking to buy gold are required to pay 85% of the current market price for taking delivery two years later, 76% for three years, 70% for four years and 63% for five years.
“There is no compensation,” Kundra said when the question of the risk if gold prices fall was brought up. “The customer takes the risk and the potential appreciation. Data of last 86 years would show that gold has seen growth of 9% per annum. In the last seven years, gold has seen 25% growth every year. Thus, it is very unlikely that the price of gold would fall to such an extent,” he said. “To start with, the customer already has up to 37% cushion.”
However, according to regulatory officials, Satyug may not be in abiding the securities law and the Forward Contracts Regulation Act. Securities and Exchange Board of India (Sebi) officials said they would seek an explanation from the company. According to Sebi officials, the offer is similar to collective investment schemes that require prior regulatory prior approval. Even one rupee collected from investors with a promise to deliver a commodity at a later date is termed as a forward contract in the commodity market, said another official familiar with the laws governing such matters.
“Satyug's scheme is violating both CIS and forward contract regulations if it has not sought any permission to launch the scheme,” said JN Gupta, a former executive director at Sebi.
“As per legal advice, the sale of gold by Satyug is a regular commercial transaction by way of specific forward contract and does not amount to CIS and need any approval. But we have written to various regulators seeking their opinion on the scheme,” Kundra said. He chose not share any of the letters sent to regulators.
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