Sebi bans Kalapi Shah of Teji Mandi Analytics for 5 yrs over PMS violations

Markets regulator Sebi on Tuesday barred Kalapi Shah, responsible for conducting business of Teji Mandi Analytics Private Ltd (TMAPL), from the securities market for five years, for flouting portfolio management services rules.

Teji Mandi, a registered authorized person of Anugrah Stock and Broking Private Ltd (ASBPL) with NSE, aided ASBPL in carrying out the portfolio management services (PMS) activities in violation of the norms.

In its order, Sebi said that Kalapi Shah, the husband of Riddhi Kalapi Shah, along with Anil Gopal Gandhi, was instrumental in managing the affairs of TMAPL. In other words, Riddhi was only a 'namesake director' and was 'filling-in' for her husband.

Further, Sebi noted that the affidavit dated August 19, 2020 submitted to it also reaffirmed his responsibility for conducting the business of TMAPL.

Besides, the regulator noted that while performing the role of a director on behalf of his wife, Kalapi Shah even signed the board resolutions, sent e-mail communications to clients which consisted of PPTs as a part of derivative advisory service, canvassed clients and promised assured returns upon the instructions of Gandhi, thereby playing a major role in TMAPL.

"I note that it is already an established fact in the ...WTM order (passed in February 2023) that ASBPL, its directors and sister concern were engaged in providing Derivative Advisory Services, thereby violating ...the SCR (security contract) rules.

"It is also pertinent to mention that ASBPL is the broker and a member of the stock exchange while TMAPL is an agent of ASBPL and registered with the stock exchange. Further, this is also an established fact that TMAPL aided and abetted ASBPL in carrying out the ...PMS activities and accordingly are liable under ...the SCR rules," Sebi Chief General Manager G Ramar said.

Having found that the noticee (Kalapi Shah) aided and abetted ASBPL in providing DAS in the nature of PMS, promising assured returns, the noticee is liable for action, Ramar added.

Accordingly, Sebi has restrained Kalapi Shah from accessing the securities market and further prohibited him from buying, selling or dealing in securities, either directly or indirectly for a period of five years.