The regulator has also directed them to provide a full inventory of assets and properties as well as details of its bank accounts, demat accounts and holdings of shares/ securities. Sebi has banned eight entities from the securities market for ten years in a case where directors of a stock broking firm allegedly garnered Rs 1,200 crore illegally from the public.
Besides, the regulator has restrained them from raising fresh funds from the public for ten years as well as pay back the money garnered within three months along with interest.
Stock broker Blue Chip Corporation Pvt Ltd (BCCPL), Nitin Rajaram Narke, Pravin B Darawade, Bhavana Chadha, Milestone Investment, Nitin Narke Investment, Blue Cheap Investment and Blue Chip Investment have been prohibited.
BCCPL is registered as a stock broker in cash and equity derivative segments of the NSE with effect from August 24, 2011.
A preliminary inquiry found that BCCPL’s directors — Narke and Darawade — misused their certificate of registration granted to act as a stock broker and collected funds from investors.
Further, Narke along with another individual floated various firms and solicited their clients to deal in securities. They had collected funds and deposits from their clients and investors through misrepresentation and allurement of high returns, according to the regulator.
It was alleged that Nitin Rajaram Narke, through 15 agents, collected around Rs 1,200 crore from the public.
The eight entities have been prohibited “from mobilising or pooling any fresh funds from their clients, other general investors or members of public in whatever form for a period of ten years”, Sebi said.
They have also been barred from “buying, selling or otherwise dealing in the securities market, directly or indirectly” for ten years, it added.
The regulator has also directed them to provide a full inventory of assets and properties as well as details of its bank accounts, demat accounts and holdings of shares/ securities.
“A basic premise that underlines the integrity of securities market is that persons connected with securities market conform to high standards of transparency, good governance and ethical behaviour prescribed in securities laws and do not resort to fraudulent activities,” Sebi Whole Time Member S Raman said in his order dated September 4.