* In an order passed on Wednesday, SEBI also prohibits Wasankars
from transferring funds mobilised from investors for purposes other than
refund
* Also prohibits Wasankar firms from collecting funds and offering portfolio management activities in ‘whatever form’
* SEBI to forward copy of the order to Enforcement Department, Financial
Intelligence Union, Economic Offences Wing, Income Tax Department for
‘further necessary action’
By Kartik Lokhande
In a major move,
Securities and Exchange Board of India (SEBI) passed an order on
Wednesday directing Wasankar Wealth Management Limited, Wasankar
Investments and their directors to refund the money collected from
investors and their clients within a period of seven days, that is, by
September 3. Further, SEBI has prohibited the firms from transferring
the funds collected from investors elsewhere, and offering portfolio
management activities.
The order signed by Rajeev Kumar Agarwal, Whole Time Member, SEBI, asked
Wasankar firms and Prashant Wasankar, Vinay Wasankar, Mithila
Wasankar,. Abhijit Wasankar, and Bhagyashree Wasankar to refund the
money to investors ‘along with income, profits or returns promised to
them under such schemes or interest at the rate of 10% per annum,
whichever is higher, from the date of investment till the date of
refund, within a period of seven days from the date of this order.’
Wasankar firms and the directors were also asked to submit a repayment
report to SEBI.
 |
| Discrepancies found by SEBI in records submitted by WWML and details stored in its computer. |
Also, SEBI has asked Wasankar firms and its directors/owners ‘to cease
and desist’ from undertaking portfolio management activities or any
unregistered activity in the securities market, directly or indirectly,
in any manner whatsoever. Wasankars have also been prohibited from
mobilising or pooling funds from its clients, other general investors or
public and from offering any portfolio management activities or any
other unregistered activity ‘in whatever form.’
Wasankars should immediately ‘withdraw and remove’ all advertisements,
representations, literatures, brochures, materials, publications,
documents, websites, etc in relation to the portfolio management
activities or any unregistered activity in the securities market, stated
SEBI order. Wasankar Wealth Management Limited, Wasankar Investments,
Prashant Wasankar, Vinay Wasankar, Mithila Wasankar, Abhijit Wasankar,
and Bhagyashree Wasankar have been prohibited from transferring the
funds/deposits mobilised from the clients or other investors or from
disposing of or alienating any asset created from funds/deposits
received from their clients or other investors, for purposes other than
refund.
SEBI has also restrained the above-mentioned entities from buying,
selling or dealing in the securities market, either directly or
indirectly, in any manner whatsoever till further directions. It has
asked the stock exchanges and the depositories to ensure that the
directions are ‘strictly enforced’. A copy of the order shall be
forwarded to the Enforcement Department, Financial Intelligence Unit,
Economic Offences Wing, and Income Tax Department for taking ‘further
necessary action’ at their end.
At the end of its 14-page order, SEBI has allowed Wasankar firms and
persons mentioned above to file their objections, if any, within 21 days
from the date of the order. Besides, they have been allowed to avail
themselves an opportunity of personal hearing before SEBI at its office
in Mumbai. At the same time, SEBI has made it clear that the directions
in the order passed on Wednesday are ‘without prejudice to the right of
SEBI to take any other action that may be initiated’ against Wasankars.
It may be mentioned here that Wasankar Wealth Management Limited was
incorporated as a private limited company on July 16, 2008 with Prashant
Wasankar and Vinay Wasankar as its promoters. Subsequently, it
converted into a public limited company with effect from April 1, 2010.
SEBI found that Prashant Wasankar had 60 per cent share-holding while
his wife Bhagyashree held 37 per cent shares in the said firm. Prashant
Wasankar, Mithila Wasankar, Abhijeet Chaudhari are directors of the
firm. Wasankar Investmments is a proprietorship firm owned by Prashant
Wasankar and is also registered as sub-broker with National Stock
Exchange. Both the firms had common address 247, Wasankar House, Shivaji
Nagar, Nagpur-440010.
When SEBI received complaints against both the Wasankar firms, it sought
explanation from Prashant Wasankar. In response, Prashant Wasankar told
SEBI that he or his connected entities had ‘not’ collected any
money/deposit from public and that the services offered by him or his
company were in the nature of facilitation of trading on National Stock
Exchange and Bombay Stock Exchange, advisory services, equity portfolio
evaluation and restructuring, stock speciific advice etc subject to
payment of membership fees. On detailed inspection, SEBI found that
Wasankar Wealth Management Limited had other group companies namely
Wasankar Agro Wealth Private Limited, H & W Agro Private Limited, OM
Bhagwate Capital Services Private Limited, and Paridhi Trading Company
Private Limited, and these entities were not registered with SEBI in any
manner.
SEBI’s Observations
* Schemes devised/offered and operated by Prashant Wasankar through his
connected/related entities namely Wasankar Wealth Management Limited
(WWML), Wasannkar Investments (WI), Vinay Wasankar, Mithila Wasankar,
Abhijeet Chaudhari and his wife Bhagyashree Wasankar were with their
completed knowledge. As such, they were not only responsible for
‘misleading’ the clients of WWML and WI and other general investors from
the public but also ffor collecting funds from them and promising
‘unrealistic returns’
* WWML has other group companies -- Wasankar Agro Wealth Pvt Ltd, H
& W Agro Pvt Ltd, Om Bhagwate Capital Services Pvt Ltd, Paridhi
Trading Co Pvt Ltd, not registered with SEBI in any manner
* Some of
the post-dated cheques issued by Prashant Wasankar for the payment of
maturity amount to investors were observed to have been dishonoured
* Prashant Wasankar and his connected/related entities have 63 bank
accounts in various banks. The credits in these 63 bank accounts for the
period April 2013 to May 20, 2014 amount to Rs 111 crore
* Prashant Wasankar has not traded in cash market
* The amount of deposits seen in the bank accounts is much more than the turnover during the period
* Wasankar and related entities collected funds mostly from senior
citizens and women from Maharashtra, Andhra Pradesh, Bihar,
Chhattisgarh, Chandigarh, Delhi, Gujarat, Haryana, Himachal Pradesh,
Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Orissa,
Punjab, Tami Nadu, Tripura, Uttar Pradesh, West Bengal; and also from
some investors in UAE and US
* There was a huge mismatch in the data provided by WWML with regard to the number of clients and the fee collected from them
* By their acts and omissions, Prashant Wasankar and his
connected/related entities have solicited, enticed, and induced their
clients and other investors to deal in securities and have also
collected funds and deposits from their clients and other general
investors through ‘misrepresentation and allurement’ of high returns
through various schemes .. when in reality Prashant Wasankar and his
related connected/related entities had ‘defaulted’ in making
repayments/refunds to their clients and investors
* Repeated fraudulent acts and delinquent behaviour of these entities
does not bode well for the integrity, orderly development, and smooth
functioning of the securities market
(27-08-14)
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