While securing registration for AIF, SBPL failed to disclose that it had been expelled by the Bombay Stock Exchange (BSE) and the previous regulatory action
“The custodian of Shares Bazaar AIF, Orbis Financial Corporation, shall not permit any debit/ credit transactions in the trading/ demat and bank account of Shares Bazaar AIF, managed by the Custodian,” said Sebi whole-time member Ananth Narayan in the interim order.
In 2022, an investigation by the National Stock Exchange (NSE) found that SBPL made false and misleading representations to investors that their funds were being invested in the securities market but they were allegedly put in a Ponzi/MLM scheme.
SBPL, without registration, offered advisory and portfolio management services with assured returns in the range of 18 per cent to 48 per cent, it was alleged.
Later, it secured a category-III AIF registration for Shares Bazaar AIF in April 2023. The fund did its first closing in November 2023 with a total capital commitment of Rs 21 crore.
While securing registration for AIF, SBPL failed to disclose that it had been expelled by the BSE and the previous regulatory action. Moreover, it was found to have engaged in ‘illegal money mobilisation activity’ even after submission of an undertaking to Sebi that it had stopped such activities.
“Considering that the registration was itself obtained through misrepresentation and concealment of material information, permitting Shares Bazaar AIF to continue to raise money from investors would be detrimental to the interest of investors and to the integrity of the securities market,” said the Sebi order.
“The credibility attached to the status as registered intermediaries cannot be used to conceal illegal activity,” it added.
First Published: Feb 02 2024 | 3:52 PM IST