Order in the matter of Anugrah Stock & Broking Private Limited

WTM/AB/SEBI/MIRSD/HO/15/2020-21
SECURITIES AND EXCHANGE BOARD OF INDIA
ORDER
UNDER SECTIONS 11(1), 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992.
IN RESPECT OF:

1. Anugrah Stock & Broking Private Limited (hereinafter referred to as “ASBPL”/ “Stock Broker”/ “Broker”/ “Trading Member”) is a member of National Stock Exchange of India Limited (“NSE”), NSE Clearing Limited, BSE Limited, Indian Clearing Corporation Limited, Metropolitan Stock Exchange of India Limited and Metropolitan Clearing Corporation of India Limited and ASBPL is registered with Securities and Exchange Board of India (hereinafter referred to as “SEBI”), as Stock Broker with registration number INZ000200231 and also a Depository Participant (DP) of Central Depository Services Limited (CDSL) with SEBI registration number IN-DP-93-2015.
Order in the matter of Anugrah Stock & Broking Private Limited

2. SEBI, based on market intelligence about ASBPL being involved in business or activities other than securities and collecting funds from clients under assured return schemes, had advised NSE, as under:

(a) In April, 2020 - to appoint a forensic auditor to look into the business activities and to ascertain misappropriation of clients’ funds and securities, if any, by ASBPL, pursuant to the advisory given by SEBI, NSE had appointed a forensic auditor on May 02, 2020 to look into the matter.

(b) On June 04, 2020 - The preliminary findings of the forensic report were discussed in the meeting held with NSE and NSE was subsequently advised to examine matter relating to the Derivative Advisory Services (“DAS”) offered by ASBPL and take corrective action in time. NSE was also advised to expedite the forensic audit process.

(c) On July 10, 2020 - NSE was advised to consider taking action of disablement of trading terminal of ASBPL, if deemed fit in the matter.

(d) On July 17, 2020 – As advised by SEBI, based on the preliminary findings of the forensic audit report, NSE issued a Show Cause Notice to ASBPL on July 17, 2020 for inter alia potentially receiving approximately Rs. 165 crores in relation to DAS from its clients promising assured returns, shortfall of client funds, incorrect reporting of margin, etc. Vide the said SCN, ASBPL was called upon to furnish its reply by July 27, 2020.

(e) On August 03, 2020 - NSE disabled the trading terminal of ASBPL in derivatives segment pursuant to advice of SEBI, as mentioned in (c) above.

3. Aggrieved by the order dated August 03, 2020 of NSE, ASBPL filed an appeal before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “Hon’ble SAT”). In the said appeal, Hon’ble SAT passed an order dated August 17, 2020 and directed as under:

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