Investors demand action against BMA Wealth, to protest outside

Clients of suspended brokerage firm BMA Wealth Creators Ltd, recently rechristened as BRH Wealth Kreators, on Tuesday said they will demonstrate outside the Sebi office here, demanding prompt action by the market regulator to resolve their grievances. Clamping down on irregularities, Securities Exchange Board of India (Sebi) had barred the stock broker which faces an allegation of diversion of client securities worth Rs 100 crore by the promoters.

National Stock Exchange had also suspended the Kolkata-based broking firm in October. "We have decided to protest outside the Kolkata Sebi office on Wednesday. The Karvy scam surfaced later but Sebi resolved the investors' grievances by returning the stocks lying with the broker's DP account, but in our case it (regulator) is silent," a former employee of the brokerage firm and an investor, Anirban Dasgupta told PTI.

On Monday, 50 odd clients of the brokerage firm held a demonstration outside the Mumbai office of Sebi, alleging "slow course of action" by the market regulator to resolve their grievances. "We estimate the magnitude of the scam will be between Rs 300-400 crore," said Dasgupta who was engaged with the broking firm for the last 10 years.

Another investor and former employee of the firm, Prasun Majumdar alleged, "Around 40,000 investors have been affected due to the irregularities of the firm and no action against the culprits was taken by the regulator." In the Karvy matter, SEBI forced depository NSDL to transfer shares lying in the broker's account to the 82,599 rightful investors who had paid in full for the securities, they said. In September, the regulator received an e-mail from the NSE about significant mismatches and inconsistencies in the balances reported by BMA. A shortfall of around Rs 100 crore worth of client securities was observed as compared to the actual records.

BMA, in its communication to the exchange, had attributed the shortfall to software issue. "NSE had further observed that out of the securities that were short, securities worth more than Rs 60 crore were prima facie used for meeting the pay in obligation of certain related clients indicating possible misappropriation of client securities.

"NSE stated that BMA has not provided any satisfactory explanation with regard to the shortfall and BMA has maintained the stance that the shortfall is due to software issue," Sebi said in the order. In a message to its investors the broking firm had recently said, "You all are aware of the present ongoing precarious situation, but we want to assure each of you that even though this is troubled time for all of us, but you should not lose hope as we are doing everything to ensure that your money is secured and in due course you receive your payment." "We are providing full support to the forensic auditor appointed under order passed by Sebi," it said..

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