Mumbai/Nagpur: Cracking down on a illegal money pooling activity running into an estimated Rs 5,000 crore, Sebi today barred an individual broker from mobilising funds from public while also asking him to refund investors money within a period of seven days.
Sameer S Joshi, a sub-broker with trade name Shreesurya Investments, has also been restrained from dealing in the securities market, till further directions.
A preliminary probe by Securities and Exchange Board of India (Sebi) found that Joshi was soliciting money from clients under various schemes by making “unrealistic claims of high returns”.
Shreesurya Investments has allegedly cornered more than Rs 5,000 crores from 6,000 investors.
According to the regulator’s findings, Joshi was promising investors in Nagpur to double their money within 15-28 months or pay 50 per cent interest rate per annum on quarterly basis besides providing free foreign trips.
“In the instant case, Sameer has solicited, enticed and induced investors and also collected funds and deposits from them through misrepresentation and allurement of high returns to such investors through various schemes when in reality Sameer had defaulted in making repayments/refunds to his investors,” Sebi said in an order today.
“Thus, schemes floated by Sameer, prima facie, appear to be representation made in a reckless and careless manner,” it added.
Accordingly, noting that investor interests need to be safeguarded, Sebi has prohibited Joshi “from mobilising or pooling funds from its clients, other general investors or public or any other unregistered activity, in whatever form”.
It has also directed him to refund the monies collected along with profits or returns promised to them “or interest at the rate of 10 per cent per annum, whichever is higher, from the date of investment till the date of refund, within a period of seven days from the date of this order (by January 27, 2015)”.
Joshi would have to submit a repayment report to Sebi in this regard, Sebi added.
Besides, Joshi has been asked “to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to the promising high returns or any unregistered activity in the securities market”.
The broker is also prohibited from transferring the funds mobilised and from disposing of any assets raised from the schemes.
Joshi is affiliated to the stock broker Kisan Ratilal Choksey Shares and Securities Pvt Limited.