Stocks

BMA Wealth Creators misappropriate Rs 100-crore worth client shares: NSE

KS Badri Narayanan Chennai | Updated on October 09, 2019 Published on October 09, 2019

SEBI bans the broking firm, seven others from accessing market.

 

SEBI has banned BRH Wealth Kreators (formerly BMA Wealth Creators) and its promoters from the stock market following the National Stock Exchange investigation found that missappropriation of Rs 100 crore from client accounts by the broking firm.

A few weeks back, the National Stock Exchange had suspended the licence of the brokerage to do any dealing in the markets..

According to SEBI, it had received an email on September 26, from NSE, saying that it had observed 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 DP record as on August 30, 2019".

However, BMA, in its communication to the NSE, had attributed the shortfall to software issue.

Misappropriation of client securities

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. The 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.

NSE has stated that, Central Depository Services (India) Ltd had informed the other market infrastructure institutions that it is receipt complaints pertaining to unauthorised transfers by BRH Wealth Kreators Ltd .

The exchange has also observed that securities of the clients were being pledged with JM Financial Products, Bajaj Finance and HDFC Bank to raise funds. On analysis of data as on August 30, 2019, the total pledge quantity of 2,72,71,205 across 1,023 scrip aggregating value to Rs 226.22 crore by BRH.

Further, on verification of data from Depositories as on September 30, 2019 by NSE, the total pledge quantity was 2,18,23,165 across 941 scrips aggregating value to Rs 169.24 crore.

Following this, Ananta Barua, SEBI Whole Time Member, in an interim order has restrained BRH Wealth Kreators Ltd, Shiv Kumar Damani, Anubhav Bhatter, Murgesh Devashrayi, BRH Commodities Private Ltd. (formerly BMA Commodities Pvt.Ltd.), Prosperous Vyapaar Private Ltd, Polo-Setco Tie Up Private Ltd and Parton Commercial Private Ltd from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, either directly or indirectly, or being associated with the securities market in any manner whatsoever, till further directions.

Published on October 09, 2019
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