Sebi bans F6 Finserve, F6 Commodities, 8 others from markets

Regulator Sebi today banned two brokers -- F6 Finserve and F6 Commodities -- and their eight former and present directors from the securities market "till further directions" in a matter related to misutilisation of funds and securities of clients.

Among the eight directors are Pankaj Goel, Parveen Sharma, Meenu Goel, Sanjay Anand, Kavita Anand, Asha Sharma, Deepak Goel and Ruchika Goel.

While Pankaj is the present director of F6 Finserve Pvt Ltd, the other seven are its former directors. Pankaj and Meenu are also the current directors of F6 Commodities Pvt Ltd.

Also, Pankaj and Meenu are the promoters of F6 and F6 Commodities and together hold 100 per cent shareholding.

The ruling has come following an inspection of F6 Finserve conducted by Sebi between August 10-30, 2017 for the period from April 1, 2015 to August 10, 2017.

Besides, leading exchange NSE had carried out the inspection of F6 Finserve on two separate occasions and forwarded the observations to Sebi.

"... during the inspection it has been observed that F6 Finserve had misused the securities and funds of its clients to the benefit of a few specific clients," Sebi said in an order.

The regulator also noted that it "prima facie" appears that the funds of the credit balance clients have been mis-utilised by F6 Finserve to fund debit balance clients or for own purposes and also that the broker has raised funds by pledging securities of clients in violation of Sebi norms.

As per the order, the two brokers are prima facie connected to each other and there were huge fund transfers between them. During the period from April 1, 2016 to March 31, 2018, the net transfer from F6 Commodities to F6 Finserve was approximately Rs 5.51 crore.

"The findings recorded in the order are based on the prima facie examination of facts and prima facie violation of law," Sebi said.

Besides banning the entities from securities market, Sebi has also directed them to provide a full inventory of all their assets "immediately but not later than five working days" from the date of receipt of the order.

Also, the banks have been directed to ensure that no debits are made in the bank accounts held jointly or severally by F6 Finserve, F6 Commodities, Pankaj and Meenu Goel, except for the purpose of payment of money to the clients under the written confirmation of the concerned stock exchange(s).

In a separate order, Sebi has imposed a fine of Rs 1.5 lakh on Frontier Capital for delay in implementing the bonus issue due to the non availability of the compliance officer in the company.

The probe found that board of Frontier Capital in its meeting dated May 30, 2016 had announced the issue of 17,163 bonus shares to its non-promoters shareholders and subsequently the company's shareholders approved the same in their meeting held on July 4, 2016.

However, due to non availability of compliance officer, the company completed the bonus issue in March 2017, which was beyond two months of the board meeting and hence violated the regulatory provisions, the regulator noted.

Under Sebi's regulation, the firm was required to implement the bonus issue within two months from the date of the meeting of its board of directors, wherein the decision to announce the bonus issue was taken.