Sebi asks MCX Biz to return investors' money, imposes 10-year market ban

Markets regulator Sebi has asked MCX Biz Solutions and its proprietor Syed Sadaq to return the money collected from investors after finding them guilty of duping investors through false documents.

Besides, they have been barred from the securities markets for 10 years.

Sebi said the company allegedly solicited money from investors promising huge returns while using fake and forged broker registration documents and a name similar to that of an exchange group.

The entity has no relation to the Multi Commodity Exchange (MCX).

The entities had also made representations and statements on their website about their activities in securities market in an "entirely untruthful manner".

They have allegedly raised more than Rs 35 lakh from investors through various schemes.

"...Noticees (MCX Biz and Sadaq) by their the act and omissions including false statements and representations in deceitful manner, have fraudulently solicited, enticed and induced investors to deal in securities," Sebi Whole Time Member S Raman said in an order dated July 20.

By indulging in such activities, they have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practice) Regulations, he added.

Accordingly, Sebi has asked MCX Biz and Sadaq to refund the money "collected from the investors in various schemes along with income, profits or returns promised to the investors under such schemes or interest at the rate of 10 per cent per annum, whichever is higher...Within a period of 30 days".

They have also been asked to submit a report, as certified by two independent Chartered Accountants, to Sebi in this regard. Besides, they were prohibited from mobilising funds from the public.

They have been directed "not to access the securities market directly or indirectly, and are further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly for a period of 10 years".

The Securities and Exchange Board of India (Sebi) in November 2013 had passed an interim order barring MCX Biz and Sadaq from dealing in the capital markets as well "to cease and desist" from undertaking any activity in the market, till further orders. Later, in February 2015, the regulator had confirmed the directions.

In that interim order, Sebi had prima facie observed that MCX Biz had displayed a fake and forged certificate of sub broker registered with Sebi and claimed it was affiliated to Bonanza Promotional Ltd.