Markets regulator Sebi has attached bank, share and demat holdings of Anugrah Stock and Broking to recover Rs 1.22 crore dues in a case related to violation of market norms.
Recovery proceedings have been initiated against Anugrah Stock and Broking Pvt Ltd after it failed to pay the Rs 1.22 crore, including interest, all charges and expenses, the Securities and Exchange Board of India (Sebi) said on Tuesday in the seizure order.
In its notice, the market watchdog asked all banks, depositories and mutual funds not to allow any debit from accounts of Anugrah Stock and Broking. However, credits are allowed.
The regulator has further directed all banks to seize all accounts, including lockers, of the defaulters.
In March 2021, Sebi issued an order and imposed a fine of Rs 90 lakh on Anugrah Stock and Broking Pvt Ltd for violation of market norms.
The order follows a joint investigation conducted by Sebi, BSE, NSE and Central Depository Services India Ltd (CDSL) between April 2017 and September 2018.
Sebi found that Anugrah Stock and Broking (Broker) had misused the funds of credit customers to meet the obligations of debit balance customers and the amount of misuse varied between Rs 8.05 crore and Rs 118.77 crore for the selected sample days.
Furthermore, the broker misused clients’ funds and securities by pledging securities other than the respective clients’ liabilities, and also failed to settle clients’ accounts.
According to Sebi, there were 16 cases of misreporting worth Rs 71.86 crore.
Contrary to norms, the broker also allowed exposure to the debit balance customers and earned interest on the debit balance.
Moreover, according to the regulator, it failed to act with due skill, care and diligence in conducting customer registration KYC and opening accounts.
The investigation concluded that the broker had violated provisions of the Securities Contracts (Regulation) Act, broker regulations, Sebi circulars, stock exchange circulars and custody instructions, among others, and subsequently imposed a fine of Rs 90 lakh on the broker.
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First print: April 18, 2024 | 4:26 am IST