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Rs 62 lakh collected under monthly income scheme

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Kolkata March 5 The market regulator has unearthed a racket in deposit collection and ordered stopping of operation of a high-return self-styled monthly income scheme based on investments in securities run by a registered sub-broker along with three other associates.

Mr V.K. Chopra, Whole-Time Member of SEBI, has asked a Howrah-based registered sub-broker, Mr Atin Das, affiliated to VCK Share & Stock Broking Services, to stop taking money from investors under the so-called monthly income scheme and return the money already collected before March 19. Mr Das and all his family members would be given a post-decisional hearing on receipt of request, the order further stated. SEBI had earlier conducted a surprise inspection of the books of accounts of the sub-broker.

During the course of the inspection at his office, SEBI said, it was found that the sub-broker had executed large volumes of trades with Indiabulls Securities in the name of his wife Ms Bani Das. Mr Das, according to the order, failed to furnish during inspection the relevant records and documents regarding his activities.

The inspection further revealed that the sub-broker had issued printed pamphlets promising high-assured monthly returns (between 1.5 and 3 per cent per month), has solicited money from investors.

The regulator could gather within a relevant period, the sub-broker had collected Rs 62 lakh from investors, out of which Rs 54.16 lakh had been collected in cash.

This money was used by the sub-broker in the stock market through his own bank accounts. The probe further revealed that during 2003-04, the sub-broker and his associate Mr Sudhir Ranjan Das have collectively traded an amount of Rs 48.92 crore through VCK Share & Stock Broking Services.

During 2004-05, Mr Atin Das, Ms Biva Rani Das and Mr Sudir Ranjan Das have collectively traded an amount of Rs 75.87 crore. Although Mr Das traded through Indiabulls in the name of his wife, it is noted that these trades were actually done on behalf of his clients for which he had also issued contract notes in his own name. The contract notes were also found to be full of irregularities. It was also revealed that he has been taking shares from his clients in his own demat account for making deliveries and payments are invariably received and paid to/from his clients in cash, acting as an unregistered portfolio manager. The record showed that there were only three clients for his entire transactions, including his self-account. "The other two clients were none but the family members of Mr Atin Das," the regulator said.

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