Markets regulator Sebi Wednesday banned Kolkata-based Kamal Kumar Kothari’s stock broker Guiness Securities Ltd (GSL) and 35 entities from securities market “till further directions” in a case related to non-settlement of client funds and misappropriation of securities.
These 35 entities also include GSL’s present and former directors. Besides, the regulator directed the entities to file their reply within 21 days, failing to do so would confirm the directions issued against the entities automatically, “without any further orders”, Sebi said in an interim ruling.
Upon receipt of NSE report, which prima facie indicated misuse of client securities worth Rs 212.17 crores across 1,139 scrips by Guiness Securities Ltd (GSL), Sebi carried out a preliminary analysis. From its preliminary analysis, the regulator observed that GSL through its 6 clients misappropriated total value of client securities worth “at least Rs 233.75 crores across 959 scrips”.
Moreover, it failed to settle the funds of the client and failed to resolve investors complaint within stipulated time, Sebi said.
By engaging in such activities, GSL ‘prima-facie’ violated Sebi’s Stock Broker and Sub Brokers regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, among others.
“The conduct of GSL, its directors and its associates is not in the interest of investors in the securities market, necessary action has to be taken against them immediately, else it may lead to loss of investors’ trust in the securities market”, the regulator noted.
Accordingly, Securities and Exchange Board Of India (Sebi) banned GSL, its present directors Dharmendra Kothari, Kamal Kumar Kothari, Tarun Kanti Sengupta and Soumen Chatterjee and former directors along with others till further directions.
Kamal Kumar Kothari in 2007 was held accountable by authorities but he did that again.