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Business Upturn
2 days ago
- Business
- Business Upturn
Motilal Oswal slapped with fine as SEBI penalizes firm for client-level reporting lapses
The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs 2 lakh on Motilal Oswal Financial Services Ltd. (MOFSL) for incorrect reporting of client information on stock exchanges, citing a lapse in due diligence expected from a registered intermediary. According to the adjudication order, MOFSL had submitted erroneous Unique Client […] By Aditya Bhagchandani Published on June 9, 2025, 15:49 IST The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs 2 lakh on Motilal Oswal Financial Services Ltd. (MOFSL) for incorrect reporting of client information on stock exchanges, citing a lapse in due diligence expected from a registered intermediary. According to the adjudication order, MOFSL had submitted erroneous Unique Client Code (UCC) details for three clients, resulting in mismatches between actual client PANs and those reported to the exchanges (NSE and BSE). Although the violations were not found to be fraudulent, SEBI noted that such discrepancies undermine market surveillance mechanisms and regulatory oversight. The regulator emphasized that stock brokers play a key role in maintaining transparency and integrity in the market, and that accurate UCC mapping is crucial for traceability of trades, especially during abnormal market movements or in investigations involving potential misconduct. SEBI acknowledged MOFSL's submission that the errors were technical and had been rectified, but maintained that the firm failed to exercise adequate care and diligence in fulfilling its regulatory obligations. The penalty has been imposed under Section 15HB of the SEBI Act, which allows for punishment in cases of contravention where no specific penalty is prescribed. This order serves as a reminder to all market intermediaries to maintain strict compliance protocols and ensure accurate client-level disclosures to the exchanges and regulators. Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Indian Express
25-05-2025
- Business
- Indian Express
ED holds raids in Ahmedabad, Junagadh in PMLA case after SEBI files complaint in special court
The Enforcement Directorate (ED) conducted search operations at four locations in Ahmedabad and Junagadh on May 23 in a PMLA case involving M/s Alderbrooke Portfolio Management Services Pvt Ltd and others, based on a complaint filed by SEBI before a special court for SEBI cases in Greater Mumbai. The complaint was filed under Section 12 and 24(1) of the SEBI Act, 1992, alleging that M/s Alderbrooke Portfolio Management Services had collected/raised around Rs 24.38 crore from its clients for their portfolio management, despite not being registered with the SEBI as a portfolio manager or in any other capacity and that it also failed to refund the collected amount. ED said that its investigation revealed that the firm was allegedly collecting funds and indulging in unauthorized portfolio management activities by entering into agreements or MoUs with its clients and managing their portfolio and funds by investing in cash as well as derivative segment without obtaining registration from the SEBI in violation of Section 12 of the SEBI Act. The search operation allegedly resulted in the recovery and seizure of various 'incriminating documents'. Further investigation into the matter is underway.
Mint
09-05-2025
- Business
- Mint
Sebi warns unregistered investment adviser; here's why investors should seek advice only from RIAs
Capital markets regulator, the Securities and Exchange Board of India (Sebi), often issues warnings to unregistered investment advisers to prevent them from offering advisory services to investors. On May 8, Sebi issued a warning to Rajni Kumari (name changed), a resident of Muzaffarpur in Bihar, for providing unregistered investment advisory services without obtaining registration as an Investment Adviser under Sebi regulations. The warning letter states that such unregistered activity is a violation of various provisions of the Sebi Act, 1992, as well as related regulations, rules, and circulars. 'This has been viewed very seriously and you are therefore warned to be careful in future and not to indulge in any kind of unregistered securities market-related activity, failing which action may be initiated in accordance with provisions of SEBI Act, 1992,' reads the letter. Notably, this is not the first time that Sebi has issued a warning of this kind. The market regulator keeps issuing such warnings to unregistered investment advisors from time to time. A new report by the CFA Institute states that only 2 per cent of influencers are registered by the SEC. If we recall, Sebi in January this year issued fresh directions for finfluencers who provide stock tips on social media platforms camouflaged as 'investor education'. The Sebi directive in January stated that the stock prices used in investor education must be three months old, and live prices cannot be used. Additionally, registered entities are not allowed to pay influencers for direct or indirect 'association'. These regulations have been in force since August 29, 2024. Read this Livemint article for further details. This raises the question of why investors should seek advice from registered investment advisors (RIAs) only. These are investment advisors registered by the Securities Exchange Board of India (Sebi) to give their advice to investors for a fee with regard to making investments in securities markets. The rules relating to investment advisors are given in the SEBI Regulations, 2013. Under IA regulations, anyone who is engaged in or willing to engage in the business of providing investment advice to clients or other persons or groups of persons is required to make an application. 'Following advice from an unregistered - instead of a registered investment advisor – is similar to taking medication based on Google's recommendation. If you are not well, you are recommended to see a doctor instead of asking Google. Likewise, for wealth generation, investors must understand different products that are suitable and, based on a fair analysis, personal advice is given by a registered investment adviser. No wonder then it is referred to as 'personal finance',' explains Sridharan S., a Sebi-registered investment advisor and Founder of Wealth Ladder Direct. For all personal finance updates, visit here.
Indian Express
07-05-2025
- Business
- Indian Express
SAT refuses to stay SEBI's interim ban order on Gensol Engineering
The Securities Appellate Tribunal (SAT) on Wednesday refused to stay an interim order of the Securities and Exchange Board of India (SEBI) that barred Gensol Engineering Ltd (GEL) and its promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi from accessing the securities market amid allegations of fund diversion, forgery and misleading disclosures. SAT directed Gensol to file its reply to the interim order passed by SEBI and further directed the market regulator to pass a final order within four weeks of hearing Gensol. SEBI in April barred Gensol Engineering and its promoters from the securities markets till further orders in a case related to alleged fund diversion and governance lapses. The regulator has also debarred Anmol and Puneet Singh Jaggi from holding the position of a director or key managerial personnel in Gensol until further orders. Further, the markets watchdog directed GEL to put on hold the stock split announced by it. The order came after the SEBI received a complaint in June 2024 relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter. Overall, brothers Anmol and Puneet Singh Jaggi, promoters of EPC firm Gensol and EV cab service BluSmart, allegedly diverted Rs 262 crore — loaned by government-owned lending agencies to procure 1,700 electric cars — towards personal indulgences and related-party entities. Based on its investigation, SEBI also found that GEL misled investors by claiming it had received pre-orders for 30,000 of its newly launched EVs at the Bharat Mobility Global Expo in January. In a 29-page interim order, SEBI said, 'The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds'. In its appeal before SAT, GEL contended that the SEBI order is 'illegal, unjustified, and unwarranted,' and fails to meet the statutory threshold for issuing such interim directions without a hearing. The company also argued that the order does not establish any pressing urgency, pointing out that the investigation stemmed from a complaint received nearly 10 months earlier in June 2024. It accuses SEBI of misusing its powers under Sections 11 and 11B of the SEBI Act. GEL claimed that SEBI relied on 'selective' and biased facts and presented a skewed narrative while ignoring explanations and business context behind the transactions.
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Business Standard
25-04-2025
- Business
- Business Standard
Settle a Sebi case? You can't claim it as a business expense anymore
On April 24, the Income Tax Department (CBDT) issued a new rule that affects how businesses handle certain legal expenses in their tax filings. In a notification issued on Thursday, the Central Board of Direct Taxes (CBDT) clarified that any expenditure incurred to resolve or settle proceedings related to violations under four specific laws will not be considered a legitimate business expense. This means such amounts cannot be deducted from taxable income while computing profits for tax purposes. What's the rule About? If a company pays money to settle a case or proceeding under any of the following four laws: SEBI Act, 1992 (for violations in the stock market) Securities Contracts (Regulation) Act, 1956 Depositories Act, 1996 (related to shareholding systems) Competition Act, 2002 (anti-trust or monopoly-related cases) then those payments cannot be claimed as a business expense while filing income tax. The decision effectively closes a tax loophole that allowed companies to potentially reduce their taxable income by treating penalties or settlement payments related to regulatory violations as normal business expenditures. What Does It Mean for Taxpayers? Let's say a company is fined by SEBI or agrees to pay a settlement to resolve a case under the Competition Act. Before this rule: They might have tried to reduce their taxable income by calling that settlement an "expense" in their profit & loss account. After this rule: They can't do that anymore. That settlement won't reduce their taxable profit, so they'll pay more tax. Why is this important? The government is drawing a line: Expenses related to breaking the law or settling legal violations aren't part of doing 'normal business.' It stops companies from getting tax benefits for wrongdoing, even if they settle instead of going through full legal proceedings. "The deductibility of settlement payments under Section 37(1) of the Income-tax Act, 1961, has long been a subject of judicial debate, particularly in cases like Income Tax Officer v. Reliance Share Stock Brokers (P.) Ltd., where consent fees paid to SEBI were allowed as business expenditure on grounds of commercial expediency." However, the CBDT brought in changes to law via Finance Act, 2024, and has now notified that any expenditure incurred for settlement or compounding of proceedings under specific legislations in India or outside, including the SEBI Act, the Securities Contracts (Regulation) Act, the Depositories Act, and the Competition Act, shall not be eligible for deductions," said Amit Maheshwari, Tax Partner at AKM Global.
