1. Sebi bans 3 entities for 10 years for fraud; asks them to repay clients

Sebi bans 3 entities for 10 years for fraud; asks them to repay clients

Regulator Sebi today barred Sri Ganesh Stocks and Shares and two individuals from the capital markets for 10 years for fraudulently soliciting funds from the public promising assured monthly returns.

By: | New Delhi | Updated: August 23, 2017 5:45 PM
Sebi, Sebi Fraud, Sebi Update, Venkatesan Chandran, K Vijaya Bharathi, mobilise fund Earlier, in April 2015, Sebi had prohibited the entities from the securities market and prohibited them from mobilising funds. (Reuters)

Regulator Sebi today barred Sri Ganesh Stocks and Shares and two individuals from the capital markets for 10 years for fraudulently soliciting funds from the public promising assured monthly returns. They have been directed to repay the money collected from investors within 90 days. According to Sebi, Venkatesan Chandran and his wife K Vijaya Bharathi solicited and collected money from public by using a trade name — Sri Ganesh Stocks and Shares — with a promise of assured monthly returns. Chandran claimed himself to be a sub-broker and affiliated to Saravana Stocks as well as associated with Nirmal Bang Securities Pvt Ltd. He collected around Rs 4.36 crore from his clients and claimed to have repaid Rs 3.71 crore to some of the investors.

“Venkatesan, his firm Sri Ganesh Stocks and Vijaya Bharathi, by their acts have fraudulently solicited and induced investors to deal in securities and have violated the provisions of…the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations,” Sebi Whole Time Member S Raman said in an order dated August 22. Sebi said the entities mobilised funds from their clients /investors for making investments without obtaining registration from it as an intermediary in violation of broker norms. Further, the couple entered into private agreements with clients in the nature of portfolio management schemes without getting registered as a portfolio manager with Sebi, thus violating PMS regulations. Such entities should not be allowed to have access to the securities market in view of the possible danger to the investors at large, Sebi said. Accordingly, Sebi has restrained the three entities from the capital markets for 10 years. Besides, they have been barred from associating with any Sebi-registered intermediary in any official capacity for 10 years.

They have been ordered to “refund the money collected from the investors in various schemes along with income, profits or returns promised to the investors …or interest at the rate of 10 per cent per annum, whichever is higher, from the date of investment till the date of refund, within a period of 90 days”. Earlier, in April 2015, Sebi had prohibited the entities from the securities market and prohibited them from mobilising funds, as they were allegedly offering unregistered PMS promising high returns.

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