sebi:WTM/KMA/NRO/IVD/387/06/2011
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Facts / Headnote
Ad-interim ex-parte directions dated October 11, 2010 confirmed against the company and its directors; investigation to be concluded not later than June 30, 2011.
Provisions invoked
- s. 19
- s. 12(1)
- s. 12A
Regulations
- Reg. 3
- Reg. 3(a)
Parties
- Credent Portfolio Management Private Limited
- Mr. Amaranjay Kumar
- Mr. Mritunjay Kumar
Holding
The ad-interim ex-parte directions issued on October 11, 2010 against Credent Portfolio Management Private Limited and its directors, Mr. Amaranjay Kumar and Mr. Mritunjay Kumar, are confirmed pending completion of the investigation.
Full text
Page 2 of 7 opportunity of personal hearing on February 15, 2011. During the hearing, Ms. Deepika Vijay Sawhney, Advocate represented the company and its directors and reiterated the submissions made in their respective replies. Mr. Mritunjay Kumar was also present in the hearing.
Page 3 of 7 had been wrong and misleading. The company also filed a copy of the resignation letter of Mr. Neeraj Kumar Sharma along with the relieving letter issued by the company. It was further submitted that the website of the company, www.credentinvest.com has been developed solely with the intent and object of offering its mutual fund distribution services to the investors and the expression “portfolio management services” contained in the said site is solely on the account of the website developer’s failure and mistake to understand the real requirements and activities of the company. The company also contended that immediately after realizing the real gravity of the expression, the same was deleted from the website. It was the contention of the company that a discretionary portfolio manager is someone who is authorised not only to carry out any transaction on behalf of the investors but also to carry out such transaction on his personal discretion. In this regard, it is important to note that the company is only in the business of mutual fund distribution and does not have any demat account to accept any securities and have never accepted any deposit from any entity. It was further submitted that the group entity, M/s. Credent Securities is a registered sub-broker and duly carrying on business of sub-broking, which is only doing client based trading as instructed by the clients. Thus, according to the company, the observation that it may be carrying on business of disc
Page 4 of 7 referred to as the PFUTP Regulations). In this regard, Mr. Amaranjay contended that in October 2006, when Mrs. Manju Deveshwar and Mr. Indra Mohan Deveshwar were going abroad, they handed over some cheques to be invested in mutual funds and transfer forms for consolidation of their shares in one demat account. However, the cheques so issued to be invested into mutual funds erroneously got deposited into another as during the said period third party cheques were allowed for mutual funds. In support of the aforesaid argument, Mr. Amaranjay Kumar contended that on the cheques getting deposited in different accounts, he had to liquidate those investments immediately the next day to rectify the error and since Mrs. Manju Deveshwar and Mr. Indra Mohan Deveshwar had already left for abroad, the investment in their name was made in good faith through other cheques. It was further submitted that in order to get better returns on the shares of Mrs. Manju Deveshwar and Mr. Indra Mohan Deveshwar, he took the liberty to transfer few of their shares in his account to sell shares giving lesser returns and to get higher return. However, he could not get adequate returns and incurred losses. In order to cover the losses, he borrowed the shares from the account of the complainant and transferred the same in account of Mrs. Manju Deveshwar and Mr. Indra Mohan Deveshwar. With the said transactions, he had transferred the same in the account of Mrs. Manju Deveshwar and Mr. Indra Mohan
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Source: SecMarx — sebi:WTM/KMA/NRO/IVD/387/06/2011. 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.