The regulator noted that a restraint order was passed against Corporate Strategic Allianz in August, 2016, for conniving and conspiring with Platinum Corporation and its directors or promoters and offloading shares in the wake of false and misleading corporate announcements, thereby making illegal gains.
Market regulator SEBI has suspended the registration of Corporate Strategic Allianz for one year as it failed to meet the "fit and proper person" requirement to act as a merchant banker.
The regulator noted that a restraint order was passed against Corporate Strategic Allianz in August, 2016, for conniving and conspiring with Platinum Corporation and its directors or promoters and offloading shares in the wake of false and misleading corporate announcements, thereby making illegal gains.
By indulging in such activities, the merchant banker violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
According to SEBI, these violations are serious in nature and certainly give a hue of doubtfulness to the integrity, reputation and character of the merchant banker.
While the merchant banker has already undergone the restraint period of three years, it has failed to comply with the direction of disgorgement of Rs 20.65 lakh as contained in the same order.
"I am of the opinion that due to the noticee's (Corporate Strategic Allianz) involvement in serious violations and the resultant restraint order, coupled with its failure to disgorge the illegal gains made by it, the noticee no longer qualifies to be a fit and proper person, " SEBI Whole Timr Member G Mahalingam said in an order passed on Monday.
"I find that the noticee is, therefore, non compliant with the conditions of registration as mandated under... the MB (merchant banker) Regulations...which have to be met on a continuous basis," he added.
Accordingly, the regulator has suspended, "with immediate effect, the certificate of registration of the noticee as a merchant banker, and such suspension shall continue till the end of one year from the date of actual receipt by Sebi of the disgorgement amount along with due interest, in full, which the noticee is liable to pay as per the direction contained in the SEBI order dated August 12, 2016".