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Sebi bars entities, individuals for unauthorised advisory services

Capital markets regulator Sebi has barred two individuals and two entities from the securities markets for providing investment advisory services without the regulator’s authorisation. The regulator has restrained Mahankal Capital, its proprietor Ajay Thakur, Money Capital Investment and its proprietor Vijay Thakur from securities markets for six months.

The direction came after complaints against 15 entities, who were allegedly involved in the activities of rendering investment advisory for the period April-November 2019 without obtaining requisite registration from the market watchdog.

Sebi conducted an examination in the matter and issued an ad interim ex-parte order dated February 07, 2020, against the entities and directed them to cease and desist from holding out/acting as an investment advisor and further prohibited them from the securities markets until further orders.

The regulator found that both the entities and their proprietors were engaged in providing investment advisory services without obtaining a certificate from Sebi as an investment adviser, which violates IA (Investment Advisers) regulations.

The amount of money prima facie to have been collected by Mahankal Capital and its proprietor raised Rs 85.02 lakh for the period April-September 2019, while Money Capital Investment raised Rs 52 lakh from its clients, Sebi said in its order on Thursday.

Mahankal Capital, its proprietor Ajay Thakur and Money Capital Investment and its proprietor are collectively referred to as noticees.

The regulator also noted that noticees have also violated the PFUTP norms due to its fraudulent conduct of falsely claiming to be a Sebi registered investment adviser.

Accordingly, Sebi said the noticees will within a period of three months refund the money received from investors as fees in respect of its unregistered investment advisory activities.

Also, the noticees have been debarred from accessing the securities markets for a period of 6 months or till the expiry of 6 months from the date of completion of refunds to investors, whichever is later.

Meanwhile, in a separate order, Sebi slapped a fine of Rs 30 lakh on 5 entities for indulging in manipulating the stock prices of Gokul Solutions Ltd.

The order came after Sebi carried out a probe into the trading in the scrip of Gokul Solutions Ltd for the period December 2014 to February 2018 to ascertain the violations of provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

Pursuant to the investigation, the regulator found all the entities are connected among themselves on various counts having off-market transactions, common directorship and a common address.

The trading pattern of the entities created a positive Last Trading Price (LTP) and it also makes it clear that they were acting in concert, thereby violated the PFUTP rules.

In another order, the regulator imposed a fine of Rs 24 lakh on 24 entities for failing to give information and for not complying with the summons issued by Sebi in the matter of Delta Leasing & Finance Ltd.

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