SEBI bars Moongipa from markets; orders impounding of assets

SEBI has barred Moongipa Investments and its directors from the capital markets after finding them guilty of misusing clients’ funds and securities.

Besides, Securities and Exchange Board of India (SEBI) has ordered impounding of financial assets of these entities.

The order comes following several complaints received against Delhi-based Moongipa Investments in the SEBI’s online complaint redressal system that were in the nature of non-payment of funds and non-delivery of securities to the clients.

After that, investor grievance panel of BSE and NSE had directed the company to return the funds or securities due to investors. However, it did not comply with this direction.

In view of the sudden spurt in the investor grievances against the firm and non-compliance of the panel order, SEBI had conducted a probe and found that Moongipa Investments has failed to segregate its own and clients’ funds and securities.

The company has “failed to refund to its clients funds and securities due to them despite directions.”

The regulator observed that Moongipa Investments was carrying out fund-based activities.

“The firm, being a registered intermediary, indulged in fund-based activities involving personal financial liability, which it cannot undertake, being a member of a recognised stock exchange and SEBI registered stock broker,” SEBI said.

SEBI has found that the trading terminals of the company were disabled by the exchanges in capital market and derivative segments in July due to fund as well as deposit shortage.

In an order dated September 9, SEBI has impounded the financial assets of Moongipa Investments and its directors namely, Madhur Agarwal, Sudhir Agarwal and Subhash Chander Singal and its former director Shiv Kumar Agarwal till further directions.

“Till further directions in this respect, the assets of these entities shall be utilised only for the purposes of refund of money and/or delivery of securities, as the case may be, to the clients/investors of Moongipa Investments under the supervision of the concerned stock exchanges,” SEBI said.

They have been restrained from the securities market with immediate effect, till further directions.

Further, they have been asked to “cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner whatsoever till further directions.”