sebi:WTM/SR/SEBI/MIRSD/22/03/2016
Facts / Headnote
Directions issued: refund of monies to investors within 60 days, restraint from securities market access for 10 years from completion of refunds, prohibition on asset sale, submission of repayment report, and inventory of assets.
Provisions invoked
- s. 19
- s. 11(1)
- s. 12(1)
- s. 12A
Regulations relied on
- SCRR, 1957
- SEBI (PFUTP) Regulations, 2003
- SEBI (Portfolio Managers) Regulations, 1993
- SEBI (Stock Brokers) Regulations, 1992
Parties
- Lee Capital Services Private Limited
- Mr. Santhosh Kumar K.L.
- Mr. Kunjiraman Pillai
Holding
Lee Capital Services Private Limited was 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 the SCRR (engaging in fund-based business involving personal financial liability), Section 12A(a),(b),(c) of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations (fraudulent and deceitful conduct), and Section 12(1) read with the Code of Conduct for Stock Brokers and Sub-Brokers. The Directors were held jointly and severally liable to refund monies collected from investors.
Full text
Page 2 of 18 v. Carrying out Fund based activities unrelated to the securities market which were outside the scope of activities of a SEBI registered Sub broker. vi. Collected more than Rs. 300 crores from the investors and not repaid as promised.
Page 3 of 18 d) to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to those schemes/activities or any unregistered activity in the securities market.”
Page 4 of 18 “the Noticees”) on December 14, 2015. It is noted that the notices were returned undelivered by the postal authorities with the remarks 'addressee left'. In view of the same, SEBI advised CSBL to serve a copy of the hearing notice. CSBL, vide letter dated November 24, 2015 informed that “ a copy of the hearing notice was affixed at the office address of Lee Capital and also the residential addresses of the Directors on November 12, 2015”. Despite the same, neither the Noticees nor their authorized representative attended the personal hearing or filed any reply till date.
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Source: SecMarx — sebi:WTM/SR/SEBI/MIRSD/22/03/2016. 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.