SEBI bars Unique Vision Financial Advisory from any activity in the securities market
This SEBI Order is to prevent Unique Vision Financial Advisory from soliciting and collecting funds from the investors and carrying on portfolio management services without due registration from SEBI
Market regulator Securities and Exchange Board of India (SEBI), has passed an order dated 22 July 2015 against Unique Vision Financial Advisory Pvt. Ltd. (UVFAPL) and its directors/promoters, Chandrakant Shamrao Dhole and Ravindra Shankar Kaurav under sections 11, 11(4), 11B and 11D of SEBI Act, 1992 prohibiting the entities from buying, selling or otherwise dealing in the securities market, either directly or indirectly.
Also, the SEBI Order directed UVFAPL to expeditiously return the monies received from its clients along with the promised returns, in respect of its unregistered portfolio manager activities and submit a certificate from a peer reviewed Chartered Accountant, within a period of 3 months.
SEBI had already issued an interim order on 29 January 2015 to suspend its portfolio management activities. The interim order observed that UVFAPL was offering portfolio management services to its clients without obtaining registration from SEBI as portfolio manager in contravention of Section 12(1) of the Securities and Exchange Board of India Act, 1992 ('SEBI Act') read with SEBI (Portfolio Managers) Regulations, 1993 ('PMS Regulations').
Before proceeding further with the matter after the interim order, an opportunity of personal hearing was afforded to the noticees on 17 April 2015, when the noticees namely Chandrakant Shamrao Dhole and Ravindra Shankar Kaurav appeared for themselves and for the company and reiterated the submissions made in the reply. UVFAPL also submitted a 'compact disc' containing the details of the bank accounts of the company. UVFAPL also requested for one week's time for submitting the written submissions which was duly granted. UVFAPL in its email dated 24 April 2015, requested for an extension till 5 May 2015, for submitting the written submissions and the bank statements. In another email dated 9 May 09 2015, the notices requested for further extension till 18 May 2015. UVFAPL in its letter dated 19 May 2015, submitted that he had collected Rs1,84,60,000 from the investors and had returned Rs1,35,87,636 to investors in the form of monthly return. UVFAPL also requested SEBI to consider the said payment as a payment of principle amount collected from the investors and agreed to pay the remaining amount i.e. Rs48,72,364 to the investors, for which UVFAPL requested for additional time. Along with this letter, UVFAPL also filed the bank statements of the company with ICICI Bank and IDBI Bank. UVFAPL, in its letter dated 11 June 2015, submitted the details of amount returned to the investors through bank and in cash. However, the details submitted for cash payments, were not supported by any acknowledgement/ receipt/ confirmation from the investors.
The SEBI Order observed, “It is noted that UVFAPL has not disputed the allegations made in the interim order rather the allegations have been admitted. The submission of UVFAPL is that the money collected was used in the 'stock market' and 'international forex market', wherein, losses were incurred. UVFAPL has admitted rotating the money of the investors.”
The SEBI Order also observed, “UVFAPL has claimed that a sum of Rs1,35,87,636 had been repaid to the investors. However, it is noted that there are several investor complaints alleging that post-dated cheques issued by the company had returned with the reason 'insufficient funds'.”
Hence, the SEBI final order (after the interim order) has no lenience for UVFAPL on account of the personal hearing and documents submitted. The SEBI Order said, “SEBI may also initiate Adjudication proceedings under Chapter VIA of the SEBI Act against UVFAPL and its promoters/ directors for the violation of indulging in unregistered portfolio management services in the securities market in breach of Section 12(1) of the SEBI Act and Regulation 3 of the SEBI (Portfolio Managers) Regulations, 1993. This Order shall come into force with immediate effect. Copies of this Order shall be served on recognised stock exchanges and depositories for information and necessary action.”