Sebi passes directions against Amrapali Aadya Trading and Investment, Aadya Commodities, directors

Markets regulator Sebi on Friday passed several directions against Amrapali Aadya Trading and Investment, Aadya Commodities and their present and former directors, including restraining them from accessing the securities market, on account of violation of various market norms.

Markets regulator Sebi on Friday passed several directions against Amrapali Aadya Trading and Investment, Aadya Commodities and their present and former directors, including restraining them from accessing the securities market, on account of violation of various market norms. Amrapali Aadya Trading and Investment Pvt Ltd (AATIPL) is registered with Sebi as a stock broker, depository participant and portfolio manager, while Aadya Commodities, a sister concern of AATIPL, is registered as a commodity derivatives broker. It was found that the entities had failed to segregate clients' securities and funds from their own, misused the power of attorney granted by the clients for movement of securities, mis-utilised clients' securities by pledging for availing loans against securities for own purposes and misappropriated clients' securities by fraudulently routing them out of the system. Besides, there was falsification of accounts and failure to carry out running account settlement and redress investor grievances, among other lapses, Sebi noted. The companies also failed to furnish information sought by the regulator. AATIPL had fraudulently sold clients' securities worth Rs 130.85 crore through the accounts of its employees and had pledged securities worth Rs 68 crore with banks/financial institutions. The investigation also revealed several instances of movement of funds and securities between AATIPL and its sister concern Aadya Commodities. For the directors, Sebi said the board of directors, being responsible for its own and company's conduct, is liable for any non-compliance of law. Therefore, the regulator has passed several directions against the entities for violation of market norms. The firms, as well as Sanjeeva Kumar Sinha and Vandana Sinha ''shall continue to be restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities being associated with the securities market in any manner ... for a further period of 5 years from the date of this order,'' Sebi said. They have also been asked to jointly and severally refund clients' money with 15 per cent interest from the date when the repayment became due till the date of actual repayment. In addition, they are liable to return the securities due to the clients of AATIPL. Sebi further said NSE, BSE and MCX shall proceed with the recovery of funds and securities from the assets of AATIPL, Aadya Commodities, Sanjeeva Kumar Sinha and Vandana Sinha to cover any shortfall in funds and securities in the escrow accounts and demat account, opened pursuant to the directions in the confirmatory order passed in October 2018. The concerned banks and NBFCs shall present their claims against AATIPL and Aadya Commodities to the exchanges. Also, Amita Sinha, Abnish Kumar Sudhanshu and Narayan Jee Thakur have been restrained from accessing securities market for a further two years from the date of the order. The order will come into force after four weeks, Sebi said.

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