Sebi bans APMS, directors from capital market for 5 yrs

Sebi has barred Alderbrooke Portfolio Management Services and its directors from the capital market for 5 years for carrying out unauthorised business activities, and has directed the company to refund money to investors.
Alderbrooke and its two directors - Anandkumar Kanubhai Ravat and Jalpeshkumar Amrutlal Makwana - had indulged in portfolio management activities without obtaining requisite registration from Sebi and were offering financial products to clients with a promise of high returns.
In an order on April 1, Sebi has restrained Alderbrooke and the directors "from accessing the securities market" and dealing in the market "for a period of 5 years".

"Alderbrooke Portfolio Management Services and its directors namely Anandkumar Kanubhai Ravat and Jalpeshkumar Amrutlal Makwana shall refund the funds collected from the investors with returns which are due to investors as per the terms of investment within a period of one month from date of this order," Sebi said.
Alderbrooke will also have to submit a repayment report to Sebi along with a certificate of refund from a practicing chartered accountant.
The Securities and Exchange Board of India order said it will initiate prosecution proceedings against Alderbrooke and will make a reference to the Ministry of Corporate Affairs to initiate the process of winding up the entity, among others, if the company fails to refund the investors as directed.

Noting the high risk to investors from such unregistered activities, Sebi has also asked Alderbrooke and its directors to "cease and desist from acting as an unregistered portfolio manager" and "not to solicit or undertake" such activities in the capital market without proper authorisation.

They have also been asked to remove all advertisements, literature, brochures, among others, in relation to their management activities or activities in the securities market.
Besides, the case will be referred to its adjudicating officer "in order to levy suitable penalty" on Alderbrooke and its directors for violating the norms, Sebi said.
Sebi noted that the very name 'Alderbrooke Portfolio Management Services (APMS)' proclaimed that "the core activity" of the firm is portfolio management.

It observed that the entity had admitted that its business activities "has inputs in the form of funds raised from the investors and outputs in the form of liabilities towards the investors, cost towards employees and management expenses.
"...APMS is not registered with Sebi in any capacity, neither as portfolio manager nor as a broker/ sub broker".
It added: "Therefore, the activities of APMS i e of acting as portfolio manager without obtaining the registration from Sebi is in in violation....PMS Regulation".
As per the order, the total assets under management with Alderbrooke were Rs 24.38 crore, as on July 31, 2013. This comprised of Rs 19.31 crore from corporate clients and Rs 5.07 crore from individuals.