Sebi bans Anugrah Stock, 5 others from securities market for up to 7 years

Sebi has barred Anugrah Stock & Broking and five other entities from the securities market for up to seven years in a case pertaining to providing unregulated portfolio management services (PMS).

The others banned by the regulator are the brokerage house's directors -- Paresh Mulji Kariya and Sadhana Paresh Kariya -- Teji Mandi Analytics, its director Anil Gopal Gandhi and Om Sri Sai Investments, an associate entity of Anugrah Stock, as per its order.

In addition, Sebi has levied a penalty totalling Rs 8 crore on Anugrah Stock, its directors and the associate entity and the fine needs to be paid within 45 days.

These four entities were engaged in providing Derivative Advisor Services (DAS) which was in the nature of portfolio management services (PMS) while promising assured returns to the prospective clients. These activities were being carried out without seeking requisite registration under the PMS rules, Sebi said in its 60-page order on Tuesday.

While indulging in such activities, they committed series of violations including stock brokers norm, PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules and PMS rules, it added.

Also, these four entities have been prohibited from the securities market for seven years, while two entities -- Teji Mandi Analytics and its director Anil Gopal Gandhi -- have been restrained from the securities market for a period of five years.

Sebi found that Teji Mandi Analytics, a sub-broker of Anugrah Stock, as well as Gandhi aided and abated Mumbai-based Anugrah Stock in providing DAS in the nature of PMS thereby promising assured returns to the clients.

In March 2021, the Securities and Exchange Board of India (Sebi) had imposed a fine of Rs 90 lakh on Anugrah Stock for misusing client funds and making incorrect reporting to stock exchanges. The order followed a joint investigation by Sebi, BSE, NSE and Central Depository Services India Ltd between April 2017 and September 2018.

In November 2020, Anugrah Stock was declared as "defaulter" by stock exchanges, besides there is also a proceeding going on for the liquidation of the brokerage house.