Market regulator Securities and Exchange Board of India (SEBI) has ordered Ravindra Bharti Education Institute Pvt Ltd, an unregistered investment advisory business set up by financial influencer Ravindra Balu Bharti, to disgorge unlawful gains of Rs12.03 crore.
In an order, Kamlesh C Varshney, whole-time member (WTM) of SEBI, says, "Facts of the case glaringly disclose how the investors' confidence has been compromised and how the systems are being abused for personal gains and attainments by the entities like Ravindra Bharti Education Institute by, devising mischievous ways to circumvent the provisions of laws for their personal enrichment but in detriment to the investors. Guaranteed returns of up to 1000% is a clear case of abuse of investors' confidence in the securities market."
SEBI ordered Ravindra Bharti Education Institute to credit or deposit unlawful gains of Rs12.03 crore in an interest-bearing escrow account, with a lien in favour of the market regulator.
"Banks are directed that no debits shall be made, without the permission of SEBI, in respect of the bank accounts held jointly or severally by Ravindra Bharti Education Institute, except for the purposes of transfer of funds to the escrow account. Further, the depositories are also directed that no debit shall be made without the permission of SEBI, in respect of the demat accounts held by Ravindra Bharti Education Institute. However, credits, if any, into the accounts maybe allowed. Banks and depositories are directed to ensure that all the aforesaid directions are strictly enforced. Further, debits in the bank accounts may also be allowed for amounts available in the account in excess of the amount to be impounded (Rs12.03 crore). Banks are allowed to debit the accounts for the purpose of complying with this order," the AO says in the order.
SEBI investigated one Balu Motiram Bharti, an authorised person of ABC Ltd, a registered stockbroker. The findings prompted the market regulator to independently examine Ravindra Bharti Education Institute. SEBI found that the Institute was engaged in stock buy and sell recommendations to investors without obtaining a registration certificate from the market regulator.
SEBI also found Ravindra Bharti Education Institute was set up in 2016 by Ravindra Bharti, a financial influencer on YouTube and son of Balu Motiram Bharti and his wife, Shubhangi Ravindra Bharti.
The market regulator also contacted some investors, who confirmed that they had individually executed agreements with Ravindra Bharti Education Institute, in terms of which it was charging monetary fees from them in lieu of rendering investment advisory services.
SEBI also observed that the number of subscribers of the YouTube channel of Ravindra Bharti, who continues to be major shareholder of Ravindra Bharti Education Institute, are increasing further. "There is a likely chance that being influenced by the social media presence and followership of Ravindra Bharti, gullible investors may continue to fall prey to the unregistered investment advisory activities of the Ravindra Bharti Education Institute. Another factor to infer that the unregistered activities are still being carried on emerges from the documents submitted vide a letter dated 18 December 2023. In the letter, a copy of the application form of an investor has been furnished with the enrolment date of 3 August 2023 for a three-year plan. Further, in terms of the statement of the payment gateway (Razorpay), a credit of Rs2.77 lakh has been made in September 2023."
The market regulator has also directed the Institute to submit the email dump of the emails issued to the advisory clients. However, SEBI says Ravindra Bharti Education Institute remained completely defiant and has not furnished the email dump constraining its proceedings.
"In view of the above discussion, it is imperative to take emergent necessary action to prevent further damage to the interest of investors that may be caused by the alleged unregistered investment advisory activity of Ravindra Bharti Education Institute, in case the same is not stopped through urgent intervention and therefore, the same needs to be stopped immediately by regulatory intervention," SEBI says in the order.
SEBI directed Ravindra Bharti Education Institute, Ravindra Bharti, Shubhangi Ravindra Bharti, Rahul Ananta Gosavi and Dhanashri Chandrakant Giri not to dispose of or alienate any of their assets, properties and securities, till such time the amount of unlawful gain is credited to the escrow account except with the prior permission of the market regulator.
Further, it asked Ravindra Bharti Education Institute, Mr Gosavi and Ms Giri not to collect any money or fee from the existing clients on account of investment advisory business.
They are also directed to immediately withdraw and remove all websites, advertisements, representations, literatures, videos, brochures, materials, publications, documents, and communications in relation to the unregistered investment advisory services activity, until further orders.
