SEBI fines Shares Bazaar and executives over assured-return scheme

India’s Securities and Exchange Board of India has imposed a combined ₹20 lakh penalty on Shares Bazaar and four of its current or former executives over alleged violations connected with an assured-return investment scheme. Under an order dated September 29, SEBI fined Shares Bazaar Pvt. Ltd, a registered research analyst, ₹10 lakh.

Director Bhupal Nanavath and former chief executive Tirumala Lakshmi Venkata Ramesh were each fined ₹3 lakh, while another director, Prasanna Lakshmi Atlur, was also fined ₹3 lakh. Current chief executive Naresh Mitta received a ₹1 lakh penalty. SEBI examined the company’s activities between March 2021 and December 2022 after receiving a reference from the National Stock Exchange in July 2022.

The examination concerned a prima facie allegation that Shares Bazaar was providing portfolio management and investment advisory services. The regulator said the company offered a scheme called “Making Millions Financially Free”. It promised annual returns of between 18% and 48% and gave investors the impression that their money would be placed in the securities market.

According to SEBI, however, there was no evidence that funds raised through the scheme were actually invested in securities. The regulator’s examination of Shares Bazaar’s bank account recorded 3,451 credit entries totalling ₹72.66 crore and 6,686 debit entries totalling ₹72.41 crore during the relevant period. SEBI said funds received from investors were transferred either to group company Kisaan Parivar Pvt.

Ltd. or used to make payments to other investors and parties. It also noted transaction descriptions including “PMS”, “dividend” and “referral”.

The regulator said Kisaan Parivar was associated with director Nanavath. It concluded that Shares Bazaar had breached provisions of the Research Analysts and Intermediaries Regulations and held the company’s directors and chief executives responsible under market regulations.