They were involved in such investment advisory services without obtaining regulatory approval from it, which is in violation of Investment Advisers (IA) norms, the Securities and Exchange Board of India (Sebi) said in its order.
Through such services, they had received a total amount of Rs 1.98 crore from December 2013 to October 2019 through unregistered investment advisory activities, it added.
Accordingly, Sebi said, the “noticees shall within a period of three months… jointly and severally, refund the money received from any complainants/ investors, as fees or consideration or in any other form, in respect of their unregistered investment advisory activities”.
Profit Sharing and Shambhakar are collectively referred to as the noticees.
Also, they have been barred from accessing the securities market for six months or till the expiry of six months from the date of completion of refunds to investors, whichever is later.
In a separate order on Tuesday, the regulator imposed a penalty of Rs 4 lakh on Safal Capital (India) Limited for violating stock brokers’ norms.
Sebi observed that the stockbroker had not settled clients’ funds, provided exposure to its clients beyond the specified period and had not uploaded Central – KYC (CKYC) details of certain clients in the Central Registry of Securitisation Asset Reconstruction and Security Interest Portal.
The order came after the regulator had conducted an inspection of the documents and other records of the stock broker in January 2020.
Through a separate order, the regulator levied a fine totalling Rs 7 lakh on Landmark Capital Advisors and two individuals — Ashish Kumar Joshi and Kedar Deshpande — for flouting provisions of portfolio managers’ rules.
Among others, Landmark failed to redress investor grievances within the required timeline and held clients’ securities in its own name.
Landmark, which was registered under PMS as well as AIF (Alternative Investment Fund) Regulations, did not maintain an arm’s length relationship in terms of utilisation of manpower between activities as a portfolio manager and as a manager of AIF, Sebi noted.
The order followed an inspection conducted by Sebi with respect to the portfolio management activities of Landmark from April 2018 to March 2019.