Markets regulator Sebi has banned SBS Investments and its two partners from the securities market for at least four years and directed them to refund the money it had collected illegally from the investors.
According to a Sebi order dated January 9, SBS had solicited money from at least 47 clients and invested them in securities and promised to share the profits received while doing its portfolio management service. The firm owes around Rs 6.5 million to its investors.
However, the regulator said SBS was offering portfolio management services without obtaining a certificate of registration.
By virtue of Srinivasa Thanga Durai and P Soundaravalli being partners in SBS, Sebi said the two individuals are jointly and severally liable with the firm for the violation of the Portfolio Manager Regulations committed by the company.
Accordingly, Sebi has asked the three entities to refund the money received from the clients in respect of the unregistered portfolio management services activities, along with the promised returns.
Besides, SBS and the two partners have been directed not to access the securities market and have been prohibited from buying, selling or dealing in it till the expiry of four years from the date of refund of the money.
The two individuals have also been restrained from associating themselves with any listed public company till the expiry of four years from the date of refund.
The three entities have also been directed not to undertake portfolio management services or any activity in the securities market without obtaining a certificate of registration from the Securities and Exchange Board of India (Sebi).