Bombay HC Bars Anugrah Stock & Broking from Using Client Assets Worth Rs58 Crore
The Bombay High Court has barred crisis-hit Anugrah Stock and Broking Pvt Ltd from using assets worth Rs58 crore that belong to more than 25 investors who filed a petition after the firm has stopped responding to them and their accounts have become inaccessible. 
 
Justice Gautam Patel, in his interim order, has asked the brokerage not to use assets of its investor-clients for its ordinary and usual course of business. It is learnt that advocate Rohaan Cama, representing Anugrah Stock & Broking, offered to disclose all movable, immovable and financial assets of the brokerage firm, along with details of any encumbrance on them. 
 
Investors were represented by Dr Birendra Saraf of Parinam Law Associates. The claims of each client have been filed as separate cases and their total investment adds up to Rs58 crore. But this is just a fraction of investors who are planning to seek legal help to recover their investment.
 
Hundreds of investors have lost large sums of money, with one south Mumbai-based family alone having invested over Rs150 crore. So the number of litigants is likely to swell, unless other investors seek other options. 
 
The bulk of investors in Anugrah have come through an associate firm called Teji Mandi Analytics which was apparently running a derivatives portfolio of over Rs1,000 crore like a Ponzi scheme with assured monthly returns. A director of this firm, Anil Gandhi has been selectively interacting with some clients and assuring them about their money being returned. Investors tell Moneylife that even on Monday night, Mr Gandhi engaged a group of investors on a zoom call that went on from around midnight to 2am. 
 
He claims to be working with Anugrah to find out the extent of sale of collateral but says that National Stock Exchange (NSE) has taken away “all his computers and data” to his office. The bottom-line is that as of now, none of the investors are sure about the safety of their money. Some investors have been smart enough to access their accounts with CDSL (Central depository of Shares Limited) and lock their share that are still available. Many others have been distressed to find that there are no share in their demand accounts at all. 
 
Meanwhile the NSE, ICICI Bank, which became the clearing broker for Anugrah in June this year, and the market regulator Securities & Exchange Board of India (SEBI) are all silent. 
 
As reported by Moneylife, last month, the Securities Appellate Tribunal (SAT) had given a reprieve to Anugrah Stock & Broking against action from NSE. However, SAT had asked the brokerage to deposit Rs165 crore with the NSE within two weeks, while granting three weeks to file a response. 
 
NSE discovered that Anugrah was running an unauthorised derivatives advisory service (DAS) through an associate firm called Om Shri Sai Investments (OSSI) since 2017. The service was shut down in 2019. It had collected Rs165.10 crore from investors. NSE issued a show-cause notice on 17th July and asked Anugrah to respond by 27th July. A day before the deadline ended, the brokerage firm asked for more time. However, on 3 August 2020, NSE shut down Anugrah’s trading rights in all derivatives segments, including futures, options, commodities and currency. Anugrah Stock & Broking then rushed to the SAT. 
 
However, as per a news report, during the hearing before Bombay HC, Dr Saraf contended that "NSE had barred Anugrah from running a derivative trade advisory service but the SAT stayed that order subject to the company depositing Rs165 crore with it within two weeks...that deadline ended on Monday but Anugrah was yet to make the payment."
 
Mr Cama, representing the brokerage, however, rebutted the claims saying that Anugrah Stock & Broking will file a detailed response to the petitions. 
 
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    COMMENTS

    djrish

    4 days ago

    furthermore karvy is still charging DP charges and other charges inspite of being non operational, this is heights of investors being taken for ride, there are no employees to respond.
    kary as rta should be banned.

    karvy wealth management is marketing as if they did nothing at all

    very sad state and sebi is sleeping like a pig.

    INDITER

    4 weeks ago

    After the scrupulous events, silence is golden for Financial Institutions and Regulatory Bodies.

    mail4ashwani

    4 weeks ago

    All Anugrah promotors must be behind bars immediately otherwise investors may not get their money back.Karvy promotes are also roaming free that's why they are not not releasing investors' shares
    from pool account after so many months.

    Here Are the New Rules, Charges for Financial Transactions Applicable from 1st July
    Several changes have kicked in from 1 July 2020 for financial transactions that will directly impact consumers at all levels. This includes limiting number of free transactions at automated teller machines (ATMs) and paying stamp duty on purchases of mutual fund units. 
     
    Other changes include provident fund (PF) rules, Atal Pension Yojana, registration in Kisan Samman Nidhi and penalty for not maintaining minimum balance for savings account in banks, among others.
     
    In March, finance minister (FM) Nirmala Sitharaman had announced a waiver on charges for three months till 30th June on ATM transactions, no penalty for minimum balance in savings account while halting auto debit for pension scheme. In addition, the government had allowed withdrawal from PF account and extended the Sabka Saath Sabka Vikas tax benefit scheme till 30th June. 
     
    Investors will also have to pay stamp duty on purchasing mutual funds from 1st July. Even if you are investing in mutual funds through systematic investment plan (SIP) and systematic transfer plan (STP), you still have to pay stamp duty.
     
    However, investors will not have to pay stamp duty on the withdrawal of mutual funds. This stamp duty will be levied on all types of mutual funds. The effect of stamp duty will be seen most on debt funds.
     
    Purchase of mutual funds will attract stamp duty at 0.005%. Apart from this, transfer of units of mutual funds from demat account will attract stamp duty of 0.015%. The imposition of stamp duty will affect the holding of 90 days and less.
     
    In view of the scarcity of cash with the people, the finance ministry had provided emergency withdrawal facility from the EPF and the last day of application is on 30th June. Shareholders could withdraw an amount which was less than thrice the basic salary and dearness allowance or 75% of the total deposit amount.
     
    In addition, the bank ATM cash withdrawal rules are changed from 1st July and all transaction except first few or limited by the banks, would be charged. During lock-down, norms for cash withdrawals from a bank ATM were relaxed but are now going to be tightened. The relaxation was announced for three months—April, May, June—and the deadline ended on 30th June. If there is no extension announced, then the old ATM withdrawal rules will get reinstated.
     
    From 1st July, ATM transactions would become expensive for all SBI customers.
     
    Also, from July, the rule of no minimum balance in the savings account will end. If the minimum balance is not maintained by the account-holder in the accounts, the bank will charge a penalty on it. 
     
    At present, the limit for keeping a minimum balance in a savings account varies for metro city, semi-urban and rural areas and is different for different banks. A minimum balance of Rs3,000 is required in metro cities, Rs2,000 in semi-urban areas and Rs1,000 in rural areas on the accounts of State Bank of India (SBI). At the same time, this amount in HDFC Bank is Rs10,000, Rs5,000 and Rs2,500 respectively.
     
    The Central government has relaxed rules to withdraw money from the Employees' Pension Fund (EPF) during the lock-down imposed for the prevention of coronavirus.
     
    From 1st July, auto debit of monthly contribution will start from Atal Pension Yojana accounts.
     
    The Pension Fund Regulatory and Development Authority (PFRDA) had, in April, directed banks to stop the auto debit of Atal Pension Yojana till 30th June. Now from today, auto debit facility will be started once again.
     
    Most of the subscribers under this scheme are from the lower strata of the society and have been facing severe crunch due to the lockdown. A recent PFRDA notification stated that the penalty interest will not be levied if the subscriber's pension scheme account is regularised before 30th September.
     
    The last date for payment of the Sabka Biswas Yojana, introduced for resolution of old pending disputed matters related to service tax and central excise, was 30th June and this scheme cannot be availed from Wednesday.
     
    The government has made it clear that it will not extend this scheme beyond 30 June 2020.
     
    In this context, the Central Board of Indirect Taxes and Customs (CBIC) had given information, in a tweet, that 0.19 million declarations of Rs90,000 crore have been filed under this scheme. If this is not paid by 30 June 2020, they will not get benefits.
     
    Under the Prime Minister Kisan Samman Nidhi Yojana, Rs6,000 is given to the farmers in three installments of Rs2,000 every year. So far five installments have been sent to the farmers. Registration for the scheme has now ended on 30th June.
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    COMMENTS

    mahesh.bhatt

    3 months ago

    Pass the messy costs created by Bank Managers & Advisors & Samanj sevaks to Samaj Easy Management Policy Take it easy sab chalta hai Wholesale Volumes businesses pe Retail's commission n margins Profiteering policies ? Like Poor Reliance Retail & Futre group defaulting wholesalers will serve Aam Aadmi as Kirana Mom Pop shops loot aam aadmi? In short short shocks aam aadmi? Mahesh Bhatt

    ajadhav42

    3 months ago

    Each & every Bank & financial Institutions should have notice paper on their doors to inform & act on the excessive or regular charges imposed by Banks in line with Ministry of Finance. They should not hastle any customers for these charges.

    kvrao42004

    3 months ago

    When there are many changes under the laundry list, it will go unnoticed. You will know only through your account where the shoe pinches.

    BR

    3 months ago

    Like it is not possible to find out what strain of Corona virus is in each place, it is not easy to know if Tapeworm or Extra Terrrestrial is in FinMin.

    tillan2k

    3 months ago

    Govt financial virus is worse than coRONA virus

    Ramesh Popat

    3 months ago

    looting accelerates!

    BR

    3 months ago

    Ever since a Tapeworm or Extra Terrrestrial entered Finance Ministry as it has eaten & will still eat all our heads.

    suketu

    3 months ago

    Modi govt killing the mutual fund industry which is already half dead.Now people wl avoid Mfunds even more and put money in blue chips.

    groupstonath

    3 months ago

    Many a time when we try to get cash from ATM we find that there is no cash. These banks which charge such exorbitant charges must be asked to pay say Rs. 250/- when they are unable to fulfill their duty which is to provide cash. This amount is to be credited to the account holders account.

    REPLY

    bpugazhendhi

    In Reply to groupstonath 3 months ago

    Yes! In such situations we are forced to access other bank ATMs which will attract fee from our account. It is double punishment for the account holders. Banks should be made to pay for denial of cash at ATMs. Charges cannot be one way!

    groupstonath

    In Reply to bpugazhendhi 3 months ago

    I have a doubt. Do these banks treat our attempt to get cash when there is no cash in the ATM as one out of 5 attempts allowed over and above which they have said they will charge extra? That would be like rubbing salt on a wound!

    yerramr

    3 months ago

    Financial inclusion will be moving to financial exclusion window. The reach of services will be not only costly but will also be distant.

    rs235m

    3 months ago

    Banks should pay fixed deposit interest on minimum balance amount or should not insist on mon bal. There should not be one sided rule.Instead of paying penalty ,close the account.

    Uniform Stamp Duty on Securities Market Instruments from 1st July
    The amendments in the Indian Stamp Act, 1899, to bring about uniformity of the stamp duty on securities across states will come into effect from Wednesday 1st July.
     
    The Centre has created the legal and institutional mechanism to enable states to collect stamp duty on securities market instruments at one place by one agency, through the stock exchange or clearing corporation authorised by it or by the depository on one instrument, an official statement said.
     
    The amendment was brought for ease of doing business and bringing in uniformity of the stamp duty on securities across states thereby building a pan-India securities market, it said.
     
    The amendments to the Stamp Act, 1899, introduced in the Finance Bill, 2019, introducing the centralised system of stamp duty with a unified rate for all financial securities transactions were to become effective from 9th January first but it was later shifted to 1st April. On 30th March, the government decided shift its implementation to 1st July due to Covid-19 related lockdown across the country.
     
    As per the amendments and the new notification, stock exchanges will now collect stamp duty for trading in securities at a unified rate from July 1 and deposit the proceeds with the Centre, which will then divide it among states where the trade took place.
     
    At present, market participants collect stamp duty at rates fixed by the state where the trade takes place and deposit it with the local government. This created a complex system with multiple tax rates and differing regulations in different states, posing a challenge to settle deals.
     
    Under the amended provisions while stock exchanges or clearing agencies would collect duty on securities transactions (sale and purchase of shares) and deposit it with the centre, for transactions that don't happen on the stock exchange (off market transactions) platform, the depositories would collect stamp duties.
     
    Under the unified stamp duty system the rate of duty has been proposed at 0.0001 per cent for transfer and reissue of debentures while rates varies from 0.0005 per cent to 0.015 per cent for other financial securities transactions rated to shares, or derivative products.
     
    "The relevant provisions of the Finance Act, 2019 amending the Indian Stamp Act, 1899 and the Indian Stamp (Collection of Stamp Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 were notified simultaneously on 10th December, 2019 and these were to come into force from 9 January 2020, which was later extended to 1 April 2020 vide notifications dated 8 January 2020," a finance ministry statement said.
     
    Considering the stakeholder requests, the nation-wide lock-down and in line with the relaxations given on other statutory and regulatory compliance, the date for implementation was further extended to 1st July. it added.
     
    As per the government, this rationalised and harmonised system through centralised collection mechanism is expected to ensure minimise cost of collection and enhance revenue productivity.
     
    Further, this system will help develop equity markets and equity culture across the length and breadth of the country, ushering in balanced regional development, the statement added.
     
    Sector experts, however, say that with the implementation of the amendment, investments in new fund offers (NFOs) or primary issues either through direct investments or investments through indirect routes like mutual funds (MFs) would become expensive.
     
    After the implementation, stock exchanges or authorised clearing corporations and the depositories will be the collecting agents.
     
    For all exchange based secondary market transactions in securities, stock exchanges shall collect the stamp duty, and for off-market transactions, which are made for a consideration as disclosed by trading parties, and initial issue of securities happening in demat form, depositories shall collect the stamp duty.
     
    The regulators, RBI and SEBI have been authorised by the Centre under the Indian Stamp Act, to issue clarificatory circulars and operational guidelines on specific issues to ensure smooth implementation from 1st July.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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