Paresh Kariya, the founder and director of Anugrah Stock and Broking Pvt Ltd (ASBPL), was arrested last night. The brokerage firm is accused of having cheated investors across the country of hundreds of crores of rupees and multiple FIRs have been filed against the owner and the broking firm. Moneylife
was the first to report this in August 2020 as the story of a scam brewing up at Anugrah
. Confirming the arrest, a senior official told Moneylife
that Mr Kariya would be in custody till 22 January 2021.
Anugrah faces litigation by over 500 investors who have moved the Bombay High Court through multiple cases. Several of these have made SEBI (the Securities and Exchange Board of India), NSE (the National Stock Exchange), NSE Clearing Corporation and Edelweiss Custodial Services party to the litigation. Investors had pleaded for a multi-agency probe into what happened with Anugrah.
The bulk of investors in Anugrah had 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.
Investigations revealed that Mr Kariya had invested the investors’ money in F&O (futures and options) and had also pledged his clients’ shares worth more than Rs100 crore to get a trading margin.
Anugrah traded in the F&O segment and the company’s clients’ margins (in shares) were kept as collateral. Investigations point that after the firm suffered a huge loss in the market, the clearing house sold off all the collaterals (margins of investors). So eventually the clients were left with no shares in their hand in which they had invested their money. Mr Kariya had failed to keep his clients informed about the losses in the market.
In September 2020, the Bombay High Court barred the brokerage house from touching the assets worth Rs58 crore of more than 25 petitioners who had made investments through it till further orders. In September, the economic offences wing (EOW) of the Mumbai Police had registered a case of cheating against the troubled stock-broking house for duping an investor of Rs8 crore.
On 13th November 2020, market regulator SEBI suspended the brokerage firm till the completion of enquiry proceedings, after finding it in violation of several market norms.
The findings of forensic audit report submitted by NSE included mis-statement about debtors and creditors, shortfall of client funds and client securities, payments made to clients having running debit balance and discrepancies in maintenance of records, among others.
Post-disablement of the firm's trading terminals by NSE in August 2020, SEBI has received 2,352 complaints under the SEBI complaints redress system (SCORES) as on 11 November 2020.
On 27 November 2020, NSE expelled the tainted broking firm from its membership and declared it as a defaulter.
You can check our exclusive coverage of Anugrah scam here