Sebi bans Fairwealth Securities directors, ex-directors

Last Updated 14 October 2019, 11:58 IST

Markets regulator Sebi has restrained the directors and former directors of stock broker Fairwealth Securities Ltd, along with six other entities, from the securities market for violation of market norms.

Dhirender Gaba, Naveen Gaba, Shripad Sadanand Desai, Sandeep Jindal, Shitla Prasad Shukla, Roop Lal Aggarwal and Kamla Prasad Shukla are the officials facing restraint from market access.

"The present order has been passed under disciplinary proceedings against the trading member for violations of Securities Laws," the regulator said while passing the order.

The order comes on a preliminary report filed by NSE which informed the regulator of various irregularities observed by the stock exchange.

NSE had informed the markets watchdog that it visited the office of the firm after receiving information that the directors of the firm were absconding.

On analysis of register of securities of Fairwealth Securities, NSE found that out of total client securities worth over Rs 103 crore, securities amounting to Rs 88 crore were not available with the trading member.

Further, the broker appeared to have sold securities worth over Rs 82 crore through accounts of five clients without these clients owning the securities.

"Based on the report by NSE, it is observed that FSL has prima facie failed to comply with the Securities and Exchange Board of India Act, 1992," Sebi said.

"It is observed that FSL (Fairwealth Securities Ltd) has prima facie misutilised funds and securities of clients with assistance/connivance with other Noticees," the order added.

The other noticees refers to Aagas Software Solutions Pvt Ltd, Katashraj Securities Pvt Ltd, Reets Plastics Pvt Ltd, Shyam Sunder Jolly, Chahek Housing Pvt Ltd and Vikram Kumar.

Consequently, these entities along with the directors and former directors of Fairwealth have been barred from the securities markets "till further directions", Sebi said.

Besides, Sebi has directed stock exchanges to appoint a forensic auditor to track misuse of clients' funds and securities and to identify net assets and liabilities of the firm.

A report in this regard has to be submitted to the regulator within 90 days.

(Published 14 October 2019, 11:55 IST)

Follow us on