sebi:WTM/ASB/WRO/WRO/24011/2022-23

SEBI · SEBI · 2021-07-31 · Ashwani Bhatia, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Violation established; joint and several refund of Rs. 1,54,73,727, asset restraint, and three-year securities market debarment directed against the firm and its four partners

Provisions invoked

• s. 12(1)
• s. 12
• s. 27
• s. 25

Regulations relied on

• SEBI (Investment Advisers) Regulations, 2013 — 3(1)

Parties

• Capital Worth Research House
• Ankit Shrivastav
• Mohammed Aamir Shaikh
• Shahid Rangrej
• Sameer Memon

Holding

Capital Worth Research House, through its website, acted as an unregistered investment adviser in violation of Section 12(1) of the SEBI Act and Regulation 3(1) of the IA Regulations, with its four partners jointly and severally liable; refund of Rs. 1,54,73,727 and three-year market debarment were directed.

Full text

Order in the Matter of Capital Worth Research House Page 2 of 24 1.2. Pursuant to the receipt of the said complaint, the matter was examined to verify the veracity of the information brought out in the complaint and ascertain whether there had been any violation of the provisions of the Securities and Exchange Board of India Act, 1992 (the “SEBI Act”), the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 (the “IA Regulations”) and any other Regulations or provisions of securities laws. Consequent to the completion of examination in the matter, a common Show- cause Notice dated July 31, 2021 (“SCN”) was issued to the entities, listed above, based on the findings of the said examination. It is in this background that the present proceeding, which is to consider the allegations made in the SCN, is before me.

Order in the Matter of Capital Worth Research House Page 3 of 24 d. The account opening form (“AOF”) received from ICICI Bank, in respect of Capital Worth’s bank account, and the accompanying documents showed Capital Worth as a partnership firm, and Ankit Shrivastav (Noticee 2), Mohammed Aamir Shaikh (Noticee 3), Shahid Rangrej (Noticee 4) and Sameer Memon (Noticee 5) as its partners. e. Also, the bank statement with respect to the said bank account was sought from ICICI Bank. It was seen from the bank statement that during the period, March 07, 2018 to December 13, 2018, a total of Rs. 1,54,73,727 had been credited to Capital Worth’s bank account. The said bank account had been opened on March 03, 2018. f. Additionally, information was sought from Easebuzz, the payment gateway which was linked to the ICICI Bank account mentioned in the preceding paragraphs. 2.2. Based on the above, it has been alleged in the SCN that the Noticees namely, Capital Worth Research House, Ankit Shrivastav, Mohammed Aamir Shaikh, Shahid Rangrej and Sameer Memon were providing investment advisory services without being registered as investment advisers. 2.3. In this respect, it has also been alleged that the Noticees had violated Section 12 (1) of the SEBI Act and Regulation 3(1) of the IA Regulations. 2.4. Accordingly, the Noticees have been called upon to show cause as to why suitable directions under Sections 11(1), 11(4) and 11B (1) should not be issued against them.

Order in the Matter of Capital Worth Research House Page 4 of 24 3. Service of SCN, Personal Hearing, and Replies and Written Submissions from the Noticees –

Source: SecMarx — sebi:WTM/ASB/WRO/WRO/24011/2022-23. 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.