sebi:WTM/SR/SEBI/EFD-DRA2/56/09/2017

SEBI · SEBI · 2015-11-09 · S. Raman, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Violations established; Noticees restrained from securities market for 10 years, directed to refund investors with 10% p.a. interest or promised returns within 90 days, prohibited from mobilizing fresh funds for 10 years, and directed to furnish asset inventory and repayment report.

Provisions invoked

• s. 11
• s. 19
• s. 12(1)
• s. 12A

Regulations

• Reg. 3
• Reg. 6
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 15
• Reg. 2(1)
• Reg. 9(f)

Parties

• Blue Chip Corporation Pvt. Ltd.
• Mr. Nitin Rajaram Narke
• Mr. Pravin B. Darawade
• Ms. Bhavana Chadha
• M/s Milestone Investment
• M/s Nitin Narke Investment
• M/s Blue Cheap Investment
• M/s Blue Chip Investment

Holding

The Noticees were found to have violated Section 12(1) of the SEBI Act read with Regulation 3 of the PMS Regulations (acting as unregistered portfolio manager), Rule 8(3)(f) of SCRR (engaging in fund-based business involving personal financial liability), Regulation 9(f) and 17(2) of the Brokers Regulations read with Clauses A(1) and A(5) of Schedule II (failure to maintain integrity), and Section 12A(a),(b),(c) of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations (fraudulent and unfair trade practices).

Full text

Page 2 of 26 2. Blue Chip Corporation Private Limited ("BCCPL") is registered with SEBI as a stock broker in cash and equity derivative segments of National Stock Exchange of India Limited (“NSE”) (Registration No. INB/INF231446536) with effect from August 24, 2011. Mr. Nitin Rajaram Narke and Mr. Pravin B. Darawade are directors of BCCPL.

Page 3 of 26 c) The concerned stock exchanges, depositories and the banks are directed to ensure that all the above directions are strictly enforced. d) The aforesaid entities are directed to provide the complete details of amounts collected from investors and amount due to each of them. e) The aforesaid entities are directed to provide a full inventory of all their assets whether movable or immovable, or any interest or investment or charge in any of such assets, including details of their all their bank and demat accounts immediately but not later than 7 working days from the date of receipt of these directions. f) The aforesaid entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, either directly or indirectly, or being associated with the securities market in any manner whatsoever, with immediate effect, till further directions. g) The aforesaid entities shall cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner whatsoever till further directions. h) Blue Chip Corporation Pvt. Ltd., Mr. Nitin Rajaram Narke, Mr. Pravin B. Darawade, Ms. Bhavana Chadha M/s Milestone Investment, M/s Nitin Narke Investment, M/s Blue Cheap Investment and M/s Blue Chip Investment are prohibited from mobilizing funds in any manner or pooling funds from public and from offering any unregistered service, in whatever form. i) Mr. Nitin Rajaram Narke, Mr

Page 4 of 26 6. Vide separate letters dated November 10, 2015, the ex-parte order cum show cause notice (“SCN”) was sent to the Noticees viz., Mr. Nitin Rajaram Narke, Mr. Pavin B. Darawade, Ms. Bhavana Chadha, M/s. Milestone Investment. However, the same were returned undelivered by the postal authorities with remarks 'left address’. SEBI also issued a Press Release dated November 10, 2015 with respect to the interim order dated November 09, 2015. As per the information furnished by the Pune District Police (Rural), Mr. Nitin Narke was arrested and put in judicial custody at Yerawada Jail, Pune. In view of the same, a copy of the order cum SCN was sent to Mr. Nitin Rajaram Narke through Superintendent of Jail, Yerawada, Pune.

Source: SecMarx — sebi:WTM/SR/SEBI/EFD-DRA2/56/09/2017. 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.