sebi:QJA/AA/NRO/NRO/29993/2023-24

SEBI · SEBI · 2023-08-16 · Dr. Anitha Anoop, Chief General Manager, Quasi Judicial Cell 1, SEBI

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Facts / Headnote

Directions issued: cease and desist from acting as Portfolio Manager; refund of Rs. 16,19,83,314.61; public notice for refund; restrictions on asset sale; banks directed to allow debits only for refunds

Provisions invoked

• s. 12(1)
• s. 12

Regulations

• Reg. 6
• Reg. 3
• Reg. 200
• Reg. 2
• Reg. 3(1)

Parties

• Mr. Nishaan Singh, Proprietor of Sanbun Investments

Holding

The Noticee was found to have offered Portfolio Management Services without obtaining registration from SEBI, in violation of Section 12(1) of the SEBI Act read with Regulation 3 of the PMS Regulations. Directions were issued requiring the Noticee to cease such activity and refund Rs. 16,19,83,314.61 collected from clients/investors.

Full text

Order in the matter of Mr. Nishaan Singh, Proprietor of Sanbun Investments Page 2 of 33 avail such services is Rs. 1 cr. Further, he was informed that Mr. Nishaan Singh would charge 50% of profit as professional fees. Mr. Nishaan Singh sought login details of demat accounts of complainant for client ID 4BBQSK with RSKV Securities India Ltd at client ID RQ7929 with Zerodha Broking to execute trade as part of its services. The said details were shared by him on March 9, 2022. (c) He has been duped by Sanbun Investments and Mr. Nishaan Singh by making false and fraudulent representation that they are SEBI registered Portfolio Manager. He has become a victim of the fraudulent activities of the Noticee. (d) On April 24, 2022, an agreement was executed with Mr. Nishaan Singh. The said agreement mentions Mr. Nishaan Singh as a registered portfolio manager regulated by SEBI. Around May 2022, his holdings amounting to Rs.1.2 Cr., were reduced to approximately 20% of initial holdings.

Order in the matter of Mr. Nishaan Singh, Proprietor of Sanbun Investments Page 3 of 33 cause as to why suitable directions under Sections 11(1), 11(4), 11B (1) and 11D of the SEBI Act, should not be issued against the Noticee for the alleged violations of the provisions of Section 12(1) of the SEBI Act read with Regulation 3 of the PMS Regulations. The following annexures were enclosed with the SCN. Table 1: List of Annexures Annexure no. Particulars 1 Complaint received by SEBI vide email dated October 6, 2022 from Mr. Kaif Khan. 2 SEBI’s letter and email dated October 7, 2022 seeking information from the Noticee. 3 SEBI’s reminder letter dated December 20, 2022 seeking information sought vide letter and email dated October 7, 2022. 4 SEBI’s email dated October 7, 2022 seeking information from the complainant 5 Complainant’s reply to SEBI’s email dated October 7, 2022 6 SEBI’s emails dated October 7, 2022, November 25, 2022, and December 02, 2023 seeking KYC documents, account opening forms and latest bank statements of the bank accounts of the Noticee. 7 HDFC Bank provided the documents sought by SEBI vide emails dated October 11, 2022, December 02, 2022 and January 11, 2023. 8 SEBI’s email dated December 20, 2022 addressed to NSE, BSE and MSEI 9 BSE’s email dated December 21, 2022 to SEBI. 10 BSE’s email dated October 21, 2022 providing details of trades executed by the complainant and Mr. Nishaan Singh. 11 NSE’s email dated October 27, 2022 providing details of trades ex

Order in the matter of Mr. Nishaan Singh, Proprietor of Sanbun Investments Page 4 of 33 accounts of Complainant to execute trade as part of its services and details were shared on March 9, 2022. The Complainant had also executed an agreement with Noticee which mentions the Noticee as a registered portfolio manager regulated by SEBI. 6.2. SEBI vide letter and email dated October 7, 2022 sought certain information from the Noticee and a reminder letter/email dated December 20, 2022 was also sent. However, no reply was received from Noticee. 6.3. SEBI vide letter and email dated October 7, 2022 sought certain information from the Complainant, the complainant vide email dated October 12, 2022 provided the details including the bank details of Noticee with HDFC Bank Ltd. (hereinafter referred to as “HDFC Bank”). 6.4. SEBI vide letter and email dated October 7, 2022 November 25, 2022, and December 02, 2023 sought Know Your Customer (hereinafter referred to as “KYC”) documents, account opening forms (hereinafter referred to as “AOF”) and latest bank statements of the bank accounts of the Noticee from HDFC bank which was provided vide emails dated October 11, 2022, December 02, 2022 and January 11, 2023. 6.5. SEBI vide email dated December 20, 2022, sought from NSE, BSE Ltd. (hereinafter referred to as “BSE”) and Metropolitan Stock Exchange of India Limited (hereinafter referred to as “MSEI”) information regarding the registration of Noticee with them as Authorized Person (hereinafte

Source: SecMarx — sebi:QJA/AA/NRO/NRO/29993/2023-24. 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.