Sebi on Monday slapped a penalty of Rs 30 lakh on Wealthit Global and its proprietor Mohit Manghnani for violating regulatory norms.
In addition, the two have been restrained from the securities markets for a period of five years.
Wealthit Global is a Sebi-registered Investment Adviser.
The order came after the regulator had conducted an inspection of the books of accounts, records and other documents of the noticee (Wealthit) for the period April 2018 to January 2020 in order to examine the compliance to various norms.
The Securities and Exchange Board of India (Sebi) found that the noticee after taking money and making promises of assured returns, failed to provide services to various complainants.
Therefore, Wealthit had failed in its responsibility to act in fiduciary capacity to its clients and flouted the IA (Investment Adviser) rules, Sebi said in its order.
The regulator also found that the noticee used deceptive devices to defraud its clients by charging excessive fees, ignoring their interests and by knowingly making false and misleading statements of assured profits.
Thereby, the noticee violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it said.
It also noted that Wealthit has not submitted the action taken report (ATR) in a time-bound manner as prescribed by the regulator and has also not resolved investors’ grievances.
Through such acts, the noticee has failed to comply with the provisions of IA regulations, it said.
The amount of money observed to have been collected by the noticee was Rs 7.30 crore in its bank accounts on or after April 2018 in contravention of the provisions of the IA rules, Sebi said.
In its order, the regulator also directed the noticee to refund the money which it had collected from the investors within a period of three months from the date of the order.
Besides, it directed the noticee to resolve all complaints received through Sebi’s SCORES portal within a period of three months.
Sebi also debarred the noticee from the securities markets for a period of five years from the date of this order or till the expiry of five years from the date of resolution of complaints and completion of refunds to complainants, whichever is later. PTI HG HG ABM ABM
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