Market regulator Sebi today suspended the certificate of registration of Chanakya Stock Broking Services for a period of one week over alleged violations of broker norms.
"...hereby suspend the certificate of registration of the noticee namely Chanakya Stock Broking Services Pvt Ltd...for a period of one week," Securities and Exchange Board of India (Sebi) said in its order.
"This order shall come into force on expiry of twenty one days from the date of this order," it added.
A probe by the regulator revealed that the stock broker had committed various irregularities such as delay in the transfer of securities to the beneficial owner account among others.
The matter had come to light after Sebi received a complaint from one Brig R S Anand (Retd) regarding certain malpractices done by his portfolio manager, P N Vijay Financial Services (PNV).
Following the complaint, the regulator conducted an inspection of the books of account and other records of PNV, in October, 2005.
As part of the probe, Sebi also conducted an inspection of Chanakya Stock Broking with whom PNV was dealing. The inspection period was from June 01, 2004 to September 1, 2005.
Sebi observed that Chanakya Stock Broking had delayed the transfer of securities to the beneficiary account which under the norms are required to be done within one working day after the pay-out date.
The said delay was ranging from 82-243 days, Sebi said.
Further, as per Sebi, Chanakya Stock Broking had created false/ backdated records in order to cover up certain lapses on the its part and that of PNV.
The stock broker had also delivered the shares to Anand from the account of PNV and Shyam Sunder Investment in 14 scrips, which were accounts other than its own.
"...there were several instances of such transfers," Sebi noted in its order.