sebi:WTM/RKA/IVD-NRO/09/2013

SEBI · SEBI · 1998-09-09 · Rajeev Kumar Agarwal, Whole Time Member

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Facts / Headnote

Certificate of registration granted to M/s. Spurt Fincap Ltd. as stock broker (Ludhiana Stock Exchange, SEBI registration no. INB 120944137) cancelled

Provisions invoked

• s. 19
• s. 24
• s. 12(3)
• s. 420

Regulations

• Reg. 6
• Reg. 27
• Reg. 28(2)
• Reg. 23
• Reg. 28
• Reg. 5A
• Reg. 5(e)
• Reg. 38
• Reg. 37
• Reg. 3(2)
• Reg. 3(1)
• Reg. 38(3)

Parties

• M/s. Spurt Fincap Ltd.

Holding

The certificate of registration granted to M/s. Spurt Fincap Ltd. as a stock broker was cancelled on the ground that it was not a 'fit and proper person', having purchased its Ludhiana Stock Exchange membership using funds provided by the Hoffland Group and lacking financial integrity.

Full text

Page 2 of 14 the stock exchanges where it was member as it had indulged in creation of false market in the scrip of JVG Departmental Stores Ltd. (c) By order dated September 09, 1998, SEBI had cancelled the certificate of registration granted to HFL to carry on the activities of a Category II merchant banker. This order was passed on the basis of the finding that the financial position of HFL had deteriorated to such an extent that its continuance as merchant banker was not in the interest of investors. (d) By order dated August 25, 1999, SEBI cancelled the certificates of registration granted to HFL (member of Bangalore Stock Exchange and Jaipur Stock Exchange having SEBI registration no. INB 080909130 and INB 160909133, respectively), to act as a stock broker since it had shown utter disregard in maintaining high standards of integrity, promptitude and fairness in the conduct of its business as a stock broker and its financial position had deteriorated and its continuance as a stock broker was found to be not in the interests of investors and other stock brokers. (e) By order dated January 29, 1998, the certificates of registration to act as stock broker granted to M/s. Hoffland Share Shoppe Ltd., member of Delhi Stock Exchange (DSE) and Madras Stock Exchange (MSE) was suspended for a period of six months applicable on all the stock exchanges where it was member. (f) By order dated August 25, 1999, SEBI cancelled the certificates of registration granted to M/s. Hoffland Sha

Page 3 of 14 (i) By order dated March 08, 2011, the certificate of registration granted to M/s. Rakesh Mishra [member of Uttar Pradesh Stock Exchange Limited] having SEBI registration no. INB 100945318 to act as a stock broker was cancelled by since it was not a 'fit and proper person'. (j) By order dated March 08, 2011, the certificate of registration granted to M/s. Suresh Kumar [member of Uttar Pradesh Stock Exchange Limited] having SEBI registration no. INB 100943418 to act as a stock broker was cancelled by SEBI since it was not a 'fit and proper person'. (k) By order dated March 08, 2011, the certificate of registration granted to M/s. Leaprofin Securities Limited [member of Over the Counter Exchange of India] having SEBI registration no. INB 200559331 to act as a stock broker was cancelled by SEBI since it was not a 'fit and proper person'. (l) By order dated November 29, 2001, the certificate of registration granted to M/s. Leaprofin Securities Limited [member of National Stock Exchange (NSE)] having SEBI registration no. INB 230559335 to act as a stock broker was cancelled by SEBI since NSE had expelled it from the membership for its failure to fulfill its pay-in obligations. (m) By order dated November 29, 2001, the certificate of registration granted to M/s. Broadline Capfin Services Ltd., [member of National Stock Exchange (NSE)] having SEBI registration no. INB 230837934 to act as a stock broker was cancelled by SEBI since NSE had expelled it from the membership

Page 4 of 14 exchange memberships was diverted from the money collected from the public by the Hoffland Group. 4. It was further informed that Mr. B.B. Sharma had also revealed that he had floated 32 companies/firms including M/s. Spurt Fincap Ltd. Thereafter, SEBI undertook investigations in the matter of Hoffland Group to inter alia find nexus and the links, if any, between various broking entities with the said group. The investigation prima facie revealed that the M/s. Spurt Fincap Ltd. a SEBI registered stock broker and member the Ludhiana Stock Exchange (LSE) having SEBI registration no. INB 120944137 had purchased the membership of LSE through the funds provided by the Hoffland Group during the year

Source: SecMarx — sebi:WTM/RKA/IVD-NRO/09/2013. 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.