sebi:ORDER/BM/LD/2022-23/16302
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Facts / Headnote
Penalty imposed on Noticee for violations of Section 23D of SCRA, 1956 and Sections 15HB and 15A(c) of SEBI Act, 1992
Provisions invoked
- s. 15A
- s. 15
- s. 19
- s. 12
- s. 15H
- s. 15F
- s. 28A
- s. 23J
- s. 23
- s. 23D
Regulations
- Reg. 17
- Reg. 3(2)
- Reg. 58
Parties
- M/s. Maxgrowth Capital Pvt. Ltd.
Holding
The Adjudicating Officer found the Noticee, M/s. Maxgrowth Capital Pvt. Ltd., in violation of Section 23D of SC(R) Act, 1956 and Sections 15HB and 15A(c) of SEBI Act, 1992 for misuse of client funds, pledging of client securities, non-settlement of client funds and securities, failure to maintain books of accounts and records, and other regulatory non-compliances, and imposed a total monetary penalty of Rs. 15,00,000/-.
Full text
Adjudication Proceedings in the matter of M/s. Maxgrowth Capital Pvt. Ltd. 2 | P a g e Sl No. Alleged violations Regulatory provisions
Adjudication Proceedings in the matter of M/s. Maxgrowth Capital Pvt. Ltd. 3 | P a g e to nullify / avoid delivery payment obligations to the Exchange, as client securities were already short with the Noticee i.e those securities were not available with the Noticee, the Noticee had taken counter positions in PRO account against positions of its clients in case of 9 instances amounting to Rs. 0.84 Crores.
Adjudication Proceedings in the matter of M/s. Maxgrowth Capital Pvt. Ltd. 4 | P a g e Overdraft facility by pledging clients’ securities with Aditya Birla Finance Ltd. (ABFL – NBFC). The pledging of clients’ securities were verified on two dates – April 12, 2018 ( date on which maximum OD was availed by Noticee) and February 28, 2019 (date on which securities lying with the NBFC as pledged were confiscated by the NBFC) . on April 12, 2018, the Noticee had availed a maximum overdraft amounting to Rs. 3.22 Crores on the total value of shares pledged on that date amounting to Rs. 6.44 Crores. No explanation provided by the Noticee with regard to the use of funds of Rs. 3. 16
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Source: SecMarx — sebi:ORDER/BM/LD/2022-23/16302. 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.