Regulator Sebi today barred stock broker Blue Chip Corporation and seven entities from the securities market for 10 years for raising money from the public in a "fraudulent and deceitful" manner.
Apart from the company and its promoters -- Nitin Rajaram Narke and Pravin B Darawade -- Bhavana Chadha, Milestone Investment, Nitin Narke Investment, Blue Cheap Investment and Blue Chip Investment have also been banned for a decade.
Blue Chip Corporation Pvt Ltd (BCCPL) is registered with Sebi as a stock broker in cash and equity derivative segments.
According to a Sebi order, money was collected by Nitin Rajaram Narke through various bank accounts opened in the name of Blue Cheap Investment, Blue Chip Investment, Milestone Investment Investments and Nitin Narke Investment.
"The noticees (Narke, Darawade and Chadha) had collected funds and deposits from the investors through misrepresentation as a portfolio manager by using the certificate of registration issued to BCCPL as a stock broker by promising high returns," Sebi said.
"The noticees have acted in fraudulent and deceitful manner in violation of... the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations," it added.
BCCPL and its promoters/directors were carrying out fund based activities through various firms and thus indulged in fund based activities involving personal financial liability, which being a stock broker it cannot undertake, in view of the prohibitions contained in of Securities Contracts (Regulation) Rules, Sebi observed.
For the violations, the regulator directed the eight entities not to access the securities market directly or indirectly and prohibited them from buying, selling or otherwise dealing in the securities market for a period of 10 years.
The Securities and Exchange Board of India (Sebi) also prohibited the eight entities from mobilising or pooling any fresh funds from their clients, other general investors or members of public in whatever form for a period of 10 years.
Further, the regulator also directed them to refund the money "collected from its clients and other investors through various schemes along with income, profits or returns promised to them under such schemes or interest at the rate of 10 per cent per annum, whichever is higher", from the date of investment till the date of refund within a period of 90 days.
Also, the eight entities have been directed to provide a full inventory of all assets and properties and details of all their bank accounts, demat accounts and holdings of shares or securities.
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