Sebi bars KRI, its proprietor from securities markets for 6 months
New Delhi, Nov 25 (PTI) Capital markets regulator Sebi has barred Knowledge Research Institute (KRI) and its proprietor from the securities markets for six months for providing unauthorised investment advisory services.
The order came after the regulator issued a show-cause notice to KRI and Ayush Jhawar in July 2021.
According to the Sebi order, KRI and its proprietor -- Jhawar -- were engaged in investment advisory services without obtaining a certificate from the Securities and Exchange Board of India (Sebi), thereby violating the IA (Investment Advisers) rules.
KRI and Jhawar are collectively to referred as noticees.
The noticees had received a total amount of Rs 27.57 lakh, Sebi said in the order on Thursday.
Sebi has directed the noticees to refund the money collected within three months from its clients as fees in respect of their unregistered investment advisory activities.
Also, the regulator barred the noticees from accessing or dealing in the securities markets for a period of six months or till the expiry of six months from the date of completion of refund to clients/investors, whichever is later.
In addition, they shall not undertake investment advisory services or any activity in the securities markets without obtaining a certificate from the regulator, either directly or indirectly, during or after the expiry of the debarment period, Sebi said in the order.
Meanwhile, in two separate orders, the regulator has disposed of show cause notices that were issued to CDSL and NSDL with respect to the alleged violation of depository participant's norms.
The matter relates to Karvy Stock Broking Ltd (KSBL) misutilising client securities worth Rs 2,300 crore, belonging to more than 95,000 clients, by pledging them from just one Demat account. The funds raised against the pledge were used by KSBL for itself and its group entities.
KSBL and its group entities utilised this money for raising Rs 851.43 crore from 8 banks/NBFCs.
The order came after Sebi along with NSE and BSE conducted a joint inspection of KSBL in June 2019.
Subsequently, a forensic auditor was appointed by NSE and a preliminary report was forwarded by it to Sebi in November 2019, based on which the regulator passed an interim order and then confirmatory order on the non-compliances observed with respect to the pledging/misuse of client securities by KSBL.
In another order, the regulator slapped a fine of Rs 7 lakh on an entity for misutilisation of client securities in the matter of Shree Tisai Consultant Pvt Ltd. PTI HG HG BAL