sebi:Adjudication_order_of_Ms_Bharat_Rasayan_Finance_Ltd
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Facts / Headnote
Penalty imposed on BRFL for multiple violations of SEBI Act, regulations and circulars
Provisions invoked
- s. 12
- s. 15H
- s. 15J
Regulations
- Reg. 3
- Reg. 26
- Reg. 18B
Parties
- BRFL (Broker)
Holding
BRFL was held liable for multiple violations including dealing with an unregistered sub-broker, non-maintenance of client database and agreements, cash dealing with clients, acting as an unregistered intermediary, and non-segregation of client and own funds, and was imposed a penalty of Rs. 2,50,000 under section 15HB of the SEBI Act, 1992.
Full text
Page 2 of 12 2.0 Notice / Reply / Personal Hearing 2.1 Accordingly, I issued a show cause notice dated January 16, 2007 to BRFL under Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Rules’) whereby it was asked to show cause as to why action should not be initiated against it for the violations mentioned in the said notice. BRFL was also advised to make its
Page 3 of 12 3.0 Consideration of issues and findings 3.1 On perusal of the inspection report, I observe that a relevant issue is the status of Mr. Ram Babu Govil (RBG) who was apparently running the Aligarh office when the inspection team conducted the inspection. BRFL has contended that RBG was only a client and that the branch representative was Navneet Jha (NJ). In support of this contention, BRFL has submitted a copy of its letter dated November 22, 2000 sent to NSE. However, it is observed that this letter was submitted to NSE for the purpose of securing approval for Mukesh Gupta as approved user and it only mentions that NJ is branch in-charge. Further if NJ was the branch in-charge when the inspection team was inspecting the operations, then what prevented NJ from representing himself as branch in- charge before the inspection team. Also all the information about operations at the Aligarh office was provided by RBG who also gave a statement to the inspection team. On the basis of above it is clear that RBG is the person in charge of BRFL’s office at Aligarh.
Page 4 of 12 Reply BRFL submitted that it has not dealt with any unregistered sub broker and also stated that RBG who is the proprietor of AC was dealing with them as an investor. In the statement recorded by the inspection team on January 17, 2005, RBG has declared that his relationship with BRFL is that of a client. On September 12, 2007 during the hearing BRFL stated that AC was only their client and BRFL has directly dealt with AC for giving / receiving shares.
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Source: SecMarx — sebi:Adjudication_order_of_Ms_Bharat_Rasayan_Finance_Ltd. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.