Anugrah Stock & Broking Suspended. SEBI Orders Enquiry While Prohibiting Disposal of Assets by Anugrah Directors, Teji Mandi and Om Sri Sai Investments

Anugrah Stock and Broking Suspended. SEBI Orders Enquiry While Prohibiting Disposal of Assets by Anugrah Directors, Teji Mandi and Om Sri Sai Investments Many months after investor-clients of Anugrah Stock and Broking Private Limited (ASBPL) were made to run from post to pillar to retrieve their money, market regulator Securities and Exchange Board of India (SEBI) has finally swung into action. In an order, SEBI has suspended Anugrah Stock and Broking, while asking ASBPL, its directors Paresh Mulji Kariya and Sadhana Paresh Kariya, Teji Mandi Anlytics Private Limited the directors of Teji Mandi Anlytics and Om Sri Sai Investments not to dispose any asset till completion of the proceedings. The development comes on the back of market intelligence which showed that ASBPL was allegedly involved in business or activities other than securities and also collected funds from clients under assured return schemes. In an order passed on Friday, SEBI whole time member (WTM) Anant Barua also barred ASBPL, its directors, Paresh Kariya Sadhana Kariya and Om Sri Sai Investments from providing any unregistered portfolio management services. In addition, all these people associated with Anugrah are asked to provide to National Stock Exchange (NSE) withing five working days, full inventory of all its assets, including assets under the possession of receiver appointed by the Hon'ble High Court of Bombay. All depositories and banks are also directed by SEBI not to make any debit in the accounts of ASBPL, Paresh Kariya, Sadhana Paresh Kariya, Teji Mandi Anlytics, Anil Gopal Gandhi, Riddhi Kalapi Shah and Om Sri Sai Investments. Last month, NSE had submitted the forensic audit report in the matter of ASBPL to SEBI, which found offering of derivatives advisory services (DAS) by ASBPL and a declared related party, misstatement about debtors and creditors, shortfall of client funds and client securities as on 27 August 2020. It also found discrepancies in maintenance of records. Mr Barua, in the order observed "I note that NSE has disabled the trading terminal of ASBPL in the derivative segment from 1 September 2020 and in all other segment 4 September 2020. I further note that various investors have approached Bombay High Court seeking relief against ASBPL. The High Court vide its order dated 18 September 2020 has appointed a receiver for the properties of ASBPL. Post disablement of trading terminals of ASBPL by NSE on 3 August 2020, SEBI has received 2,352 complaints under the mechanism of SCORES (SEBI Complaints Redress System) against ASBPL as on 11 November 2020." He then ordered disciplinary enquiry proceedings against ASBPL, proceedings for issuing regulatory directions against Paresh Mulji Kariya, Sadhana Paresh Kariya, both directors of ASBPL, Om Sri Sai Investments, Teji Mandi Analytics, which is registered as authorized person of ASBPL with NSE, and the directors of Teji Mandi Analytics namely Anil Gopal Gandhi and Riddhi Kalapi Shah. SEBI also ordered initiation of prosecution against ASBPL, Paresh Mulji Kariya, Sadhana Paresh Kariya and Om Sri Sai Investments under Section 24(1) of SEBI Act, 1992 for prima facie acting as unregistered portfolio manager. "Stock exchanges are directed to expedite the proceedings to declare ASBPL as a defaulter. Default proceedings may be initiated by stock exchanges/ depositories as per their bye-laws and SEBI circular no. SEBI/HO/MIRSD/DPIEA/CIR/P/2020/186 dated 28 September 2020 for recovery of assets of ASBPL and debit balance clients, in order to invite the claims of investors as per the bye laws of the exchange," the order passed by SEBI's WTM says. Last month, investor-clients of Anugrah demanded the setting up of a multi-agency special investigation team so that the assets are consolidated and auctioned efficiently. The petition has made the NSE, the NSE Clearing Corporation and Edelweiss Custodial Services as respondents. For the high-profile case, several hundred investors have come together to try and recover their money. The amount involved and believed to be lost exceeds Rs1,3000000000. Moneylife has covered the details of this case extensively. Our articles can be read here The bulk of investors in Anugrah have come through an associate firm, called Teji Mandi Analytics which was apparently running a derivatives portfolio of over Rs1,0000000000 like a Ponzi scheme with assured monthly returns. Last month, the EOW of Mumbai police has registered a case of cheating against the troubled stock-broking house, Anugrah Stock and Broking Private Limited for duping an investor of Rs80000000. As Moneylife has reported in the past, the extent of investor losses in Anugrah could be as high as Rs1,0000000000 and investigators have confirmed that more complaints having been subsequently coming to the EOW.