sebi:WTM/KMA/NRO/IVD/365/03/2011
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Facts / Headnote
Certificate of registration cancelled
Provisions invoked
- s. 19
Regulations
- Reg. 199
- Reg. 28
- Reg. 38(3)
- Reg. 5(A)
- Reg. 6A(d)
Parties
- M/s Suresh Kumar (Registration no. INB 100943418), Member, Uttar Pradesh Stock Exchange Limited
Holding
The certificate of registration of the stock broker M/s Suresh Kumar (Registration no. INB 100943418), Member, Uttar Pradesh Stock Exchange Limited, was cancelled for not being a "Fit and Proper Person" and for non-payment of turnover fees.
Full text
Page 2 of 5 (Intermediaries) Regulations, 2008 (hereinafter referred to as the Intermediaries Regulations) to enquire into the alleged violations of Regulations 5(A), 5(e), 6(A)(a) and 6A(d) of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations 1992 (hereinafter referred to as the Broker Regulations) read with Regulation 38(3) along with Schedule II of the Intermediaries Regulations. The Designated Authority (hereinafter referred to as the Enquiry Officer), vide Report dated March 24, 2010, while recommending the cancellation of the certificate of registration of the Broker observed that the Broker had contravened Regulation 5(A), 5(e) and 6A(d) of the Broker Regulations.
Page 3 of 5 material on record. One of the allegations leveled against is that the Broker is not a “fit and proper person” for the following reasons:- a. The Broker was a benami company of Hoffland Group and Hoffland Group had defaulted in payments to various investors. b. The conduct of the Hoffland Group had been investigated by the police and several prosecution cases had been initiated against it. c. The Broker had not paid SEBI turnover fees of `2,67,995/- including an interest of `3,47,261. (As on November 23, 2010, principal amount outstanding was `2,67,995/- and the interest was `4,71,273/- (total `7,39,268/-)
Page 4 of 5 seller of the ticket (membership of the Broker). It has been confirmed by the said Bank that the aforesaid demand draft was issued from the account no. 1984 of Hoffland Securities Limited. It stands established that Hoffland Group had financed the purchase of the said ticket and had acquired the said membership in the name of Mr. Suresh Kumar, who was also their employee. Thus, it clearly establishes that there were close linkages between the Broker and the Hoffland Group. It is also observed that the modus operandi in the instant case was similar to that followed by Hoffland group in acquiring other memberships around that time. I note that the conduct of the Hoffland Group has been investigated by the Police and that it is learnt that several prosecution cases have been initiated against it. Further, Hoffland Group has defaulted in payments to its investors. It stands established that the Broker does not fulfill the basic parameters such as financial Integrity, good reputation, character, etc to be considered as “Fit and proper Person” for the purpose of acting as a registered stock broker with SEBI. It is thus established that the Broker is not a fit and proper person as required under 5(e) of the Broker Regulations which required the member to be a “Fit and Proper Person”. The Broker is not a fit and proper person in terms of the Fit and Proper Person Regulations as well as the Intermediaries Regulations and failed to comply with the requirements of Regulation
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Source: SecMarx — sebi:WTM/KMA/NRO/IVD/365/03/2011. 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.