SEBI Order on CapitalVia: Collect Rs2 Crore Illegally; Pay a Fine of Rs50 Lakh
Moneylife Digital Team 01 December 2022
Market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs50 lakh on CapitalVia Global Research Ltd and its directors—Kiran Ravindra Kumar Choudhary, Rohit Gadia and Prem Prakash. The penalty has to be paid jointly and severally. The order copy remains strangely quiet on the issue of refunding the fees collected by the so-called Indore-based 'advisory'. Moneylife had reached out to SEBI and CapitalVia Global Research to check what happens to the Rs2 crore, which was collected by the company. Did the company manage to keep the rest of the money? We have not heard back from them as yet. The story will be updated if we get a response from them.  
The order came after SEBI conducted an inspection of CapitalVia from April 2016 to September 2017 to verify whether the firm and its directors had complied with regulatory requirements prescribed under IA (investment advisers) norms. 
SEBI had issued two orders against the company and its directors. In the first order in November 2016, it directed the company and its directors not to solicit or undertake any fresh advisory business from the date of order till further directions. In its second order, which was passed on January 2017, the company and its directors were further directed not to solicit or undertake any fresh advisory business for another period of four months from the date of the order.
Thus CapitalVia Global Research Ltd was restrained from soliciting or undertaking any advisory business from November 2016 to May 2017.
However, despite these orders, the regulator observed that CapitalVia Global Research Ltd had solicited fresh subscriptions of its services from existing as well as new clients and had received advisory fees for undertaking new assignments for providing advisory services during the restrained period, i.e., November 2016 to May 2017.
It also observed that 625 clients had transferred Rs2.08 crore towards fees charged by CapitalVia for its various services, which was in violation of the SEBI orders, thereby violating IA regulations.
As a SEBI-registered investment adviser, the company CapitalVia Global Research Ltd along with its directors Kiran Ravindra Kumar Choudhary , Rohit Gadia and Prem Prakash  were under a statutory obligation to abide by the provisions of IA regulations and act honestly and fairly in the best interests of their clients.
However, the company and its directors failed to comply with the norms and the directions contained in SEBI orders dated November 2016 and January 2017.
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