In addition, a penalty of Rs 5 lakh has been imposed on them. They have to pay the fine within 45 days, Sebi said in its order passed on Wednesday.
Sebi noted that Shri Research Services and its sole proprietor Gour carried out investment advisory activities without obtaining a certificate of registration from the regulator. This violated the provisions of Investment Advisers (IA) Regulations.
The regulator said that a total of Rs 14.63 lakh was credited in their accounts for the January-July, 2018 period. However, it could not be confirmed whether such amounts were received only from investors for unregistered investment advisory services.
“Noticees shall within a period of three months from the date of coming into force of this direction, refund the money received from the clients/investors/complainant, as fees or consideration or in any other form, in respect of their unregistered investment advisory activities,” the regulator said.
Shri Research Services, and Gour are collectively referred to as noticees.
Also, they have been barred from accessing the securities market and further prohibited from buying, selling or dealing in the securities market for two years or till the expiry of two years from the date of completion of refunds to investors, whichever is later.
In addition, they have been restrained from associating with any listed company or any registered intermediary during such period.
In view of the exceptional circumstances due to the outbreak of COVID and consequential lockdowns imposed in different parts of the country, the direction related to refund will come into force on July 1, 2021, the order said.
Separately, the watchdog imposed a fine of Rs 5 lakh each on N P Enterprise and Laxmi Trading for flouting norms way back in 2011 in the case of Birla Pacific Medspa Ltd (BPML).
Sebi noted that Rs 6.61 crore out of the total IPO proceeds had been advanced to these entities by BPML for purchase of medical equipment. However, these entities were not in this line of business and also no medical equipment were purchased.
Therefore, it is clear that the amount was diverted by BPML to the entities and was neither utilised for the stated object of IPO nor returned to the company, Sebi said in an order on Tuesday.
“By participating in routing of IPO funds of BPML through deceptive and fraudulent transactions, noticees (N P Enterprise and Laxmi Trading) have facilitated BPML to divert IPO money for purposes other than stated in the prospectus and thereby defrauded investors who have invested in the IPO of BPML,” Sebi noted.
By indulging in such activities, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it added.
