Capital markets watchdog Sebi has imposed a penalty of Rs 1 crore on Money Classic for violating regulatory norms. Sebi, through its order dated August 7, 2019, conducted an inspection of Money Classic — a Sebi-registered Investment Adviser (IA) — during 2019-2020, as per rules.
However, the entity was not traceable and accordingly, the inspection could not be conducted, the regulator had said.
The noticee (Money Classic) has failed to resolve the grievances of the investor in timely manner, and assured return to its clients, thereby, intentionally manipulating the fiduciary relations with its clients, Sebi said in its order dated September 16.
Further, it had not submitted any information to Sebi as asked by the regulator through its interim order passed in December 2019.
“I also note that it (Money Classic) has failed to file any representation before me in the present adjudication proceedings.
“Further, I note that Money Classic has failed to provide details regarding year-wise fees collected from the date of registration, and thus, in absence of any response from the noticee, the deposit of Rs 87.02 lakh as fees collected by the noticee in its bank account from April-August 2019, (should) also be taken into consideration as a fees charged to investors,” Sebi’s Adjudicating Officer Vijayant Kumar Verma said in the order.
By indulging in such acts, Money Classic has violated IA norms, as well as the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) rules.
As per Sebi norms, a registered intermediary cannot be termed as “fit and proper” when it is not fulfilling one of the primary duties, i.e. resolving complaints of its clients, obligation of investment adviser on inspection.
The regulator found that the noticee violated the “fit and proper” criteria under the IA regulations.
In a separate order on Monday, Sebi imposed a penalty of Rs 25 lakh each on Vishal Ahuja and Prashant Prabhakar Gadkari for not complying with disclosure norms in the matter of Setubandhan Infrastructure Ltd (formerly known as Prakash Constrowell Ltd).