SEBI Bars 6 Firms, 3 Partners from Markets, Asks To Refund Rs8.10 Crore to Investor-Clients
Moneylife Digital Team 29 November 2023
Market regulator Securities and Exchange Board of India (SEBI) has barred three individuals, Yogesh Kukadia, Rajesh R Kallidumbil, Nithin Raj and their six partnership firms Signal2Noise Capital Partners, Investo Investment Advisers, SS Info Sales, SI Digi Sales, CT Web Sales and ML Tele Sales from markets for two years. While asking these entities to return Rs8.10 crore to investor clients, SEBI imposed a fine of Rs9 lakh on them for providing illegal investment advisory services. 
In the order, Dr Anitha Anoop , chief general manager  (CGM) of SEBI, says, "I note that the activities of the noticees, show that they were acting as investment advisers without holding a valid registration with SEBI in the capacity of investment advisers’ find that these activities were being carried out by the noticees without obtaining the necessary certificate of registrations investment advisers and therefore, the noticees have violated section 12(1) of the SEBI Act along with Regulation 3(1)of the IA Regulations.”
SEBI received complaints in respect of three entities Marketlabh, Signal2Noise Capital Partners and Capital Tajalleging that they were engaged in unregistered investment advisory activities. On examination, SEBI observed that the entities were being operated by three partnership firms ML Telesales, Signal2Noise Capital Partners and CT Web sales. It was also observed that Mr Kukadia and Mr Kallidumbil, were partners of ML Telesales and CT Websales. Further, all the three were partners of Signal2Noise Capital Partners as well.
The market regulator mentioned that out of the total fees of Rs8.10 crore collected through these six partnership firms, a sum of Rs.4.90 crore was received through the payment gateways, Easebuzz and PayUMoney in their bank accounts. The know your customer (KYC) and related documents like account opening forms (AOF) and partnership deeds of these six partnership firms obtained from ICICI Bank, HDFC Bank and Axis Bank and the payment gateways revealed that the three individuals were the accont holders.
Further, SEBI observed that Signal2Noise Capital Partners and Investo Investment Advisers, the nature of business, have been mentioned as providing investment advisory services to the registered clients. SEBI observed that these partnership firms were providing advisory services for buying, selling and trading in securities for a fee to their clients under various packages or products.
SEBI also found out that Mr Kukadia and Mr Kallidumbil are registered as investment advisers in their individual capacities since 20 March 2018 and 3 December 2018, respectively. However, their partner Mr Raj, along with its six partnership firms are not registered with SEBI.
SEBI has ordered Mr Kukadia, Mr Kallidumbil and their partner Mr Raj, along with its six partnership firms, to refund the amount collected as fees for investment advisory from various people within three months.
These noticee are restrained from selling their assets and properties and holding mutual funds, shares, and securities in demat and physical form except for the sole purpose of making the refunds, SEBI says.
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