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Sebi Bans Minance Investment Advisor, Promoter, 2 Others From Capital Market

The move comes after the regulator received a number of complaints against Sebi-registered investment adviser Minance Investment Advisor Pvt Ltd (MIAPL)

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Markets regulator Sebi has barred Minance Investment Advisor, its promoter-director Anurag Bhatia and two others for not complying with investment adviser norms.

The move comes after the regulator received a number of complaints against Sebi-registered investment adviser Minance Investment Advisor Pvt Ltd (MIAPL). Pursuant to the complaints, Sebi carried out a preliminary examination in relation to the affairs of the company.

Sebi, prima facie, observed that MIAPL failed to disclose the change in office address and composition of its board of directors to the regulator. Also, it does not have a compliance officer.

In addition, MIAPL does not meet capital adequacy requirements as required for investment advisors(IAs) under the rules, which mandated that IAs should not have a net worth of less than Rs 25 lakh.

Further, Sebi's independent assessment of the same revealed that Minance's balance in its bank accounts is nil as of September 8, this year.

Also, several First Information Reports (FIRs) have been filed against MIAPL and Bhatia, across India for alleged criminal breach of trust, cheating under The Indian Penal Code, 1860 and offences under The Information Technology Act, 2000, as per the Sebi order.

'The activities and manner of operation of MIAPL, has cast a shadow of doubt on its financial solvency and efficient running of its operations,' Sebi said in its interim order passed on Tuesday.

Availing of MIAPL's service is detrimental to investors as MIAPL neither has the compliance officer nor has the requisite board strength to effectively function as a company, it added.

'This coupled with the prima facie finding that MIAPL's net worth is not at the desired level along with its promoter – director, Anurag Bhatia's prima facie failure to honour the cheques, indicates that services offered by MIAPL, will not be in the best interest of its clients,' Sebi noted.

Accordingly, Sebi has barred MIAPL, Bhatia, two former directors -- Sarbashish Basu and Pankaj Mahanty -- from the capital markets.

Also, they have been directed 'to cease and desist from undertaking any activity in the securities market including the activity of acting and representing through media as an investment advisor'.

Sebi noted that directors failed to exercise due care and diligence when it came to discharge their duty and failed to ensure that the affairs of MIAPL are run within the four walls of the relevant statutory provisions.

Also, MIAPL has been asked to immediately withdraw and remove all advertisements, brochures, among others in relation to its investment advisory activity.

The directions will be in force until further orders, the Securities and Exchange Board of India (Sebi) said.


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