Sebi bans stock broker for illegal fund raising activities

Sebi has barred stock broker Blue Chip Corporation (BCCPL) as well as its promoters from the securities market for raising money from the public in a fraudulent and deceitful manner.
Apart from promoters -- Nitin Rajaram Narke and Pravin B Darawade -- Bhavana Chadha, Milestone Investment Ltd, Nitin Narke Investment Ltd, Blue Cheap Investment Ltd and Blue Chip Investment Ltd have also been banned till further directions.
It was alleged by a Pune-based investors association that Nitin Rajaram Narke had raised about Rs 1,200 crore from the public through Milestone Investment, Nitin Narke Investment, Blue Chip Investment, by promising high returns.

BCCPL is registered with Sebi as a stock broker in cash and equity derivative segments.
"The aforesaid entities shall cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner whatsoever till further directions," the Securities and Exchange Board of India (Sebi) said in an order.
These entities violated stock brokers norms and also acted in "fraudulent and deceitful manner", it added.

In addition, they have been prohibited from mobilising funds.
Sebi has decided to impound the financial assets of all these entities apart from directing them not to dispose off or alienate any of their assets.

BCCPL has also been directed to provide a full inventory of all its assets and properties as well as furnish complete and relevant information to the regulator.
According to Sebi, BCCPL and the other entities "solicited, enticed and induced their clients and other investors to deal in securities and have also collected funds and deposits from their clients and other general investors through misrepresentation and allurement of high returns..."
Noting that BCCPL has only two promoters/directors, Sebi said Nitin Rajaram Narke floated several firms, including sole proprietorship firm and partnership firm with Bhavana Chadha and solicited money from general investors to make investment in the securities market on their behalf by promising high returns.