Sebi bars Sunchan, 5 officials, from market for 7 years

Market regulator Sebi today barred Sunchan Securities and its five executives from the capital market for seven years for violation of various norms.
The five executives -- Sunil Mansinghani, Kanchan Mansinghani, Ashok Daswani, Surendra Gama Yadav and Riyaz Ismail Shaikh -- are also prohibited from taking up position of director or compliance officer in any listed company or from being associated with any entity registered with Sebi. This debarrment would be applicable for seven years.
Except for Shaikh, who was compliance officer at stock broking firm Sunchan Securities, other four individuals were directors.
Besides, the Securities and Exchange Board of India (Sebi) has ordered Sunchan and the four directors to pay nearly Rs 10 crore within 45 days.

In a 20-page order, Sebi Whole Time Member Prashant Saran directed "Sunchan and its directors to compensate investors to the extent their claims were not fully met out of IPF of Rs 5,30,96,338.27".
The regulator also asked them to replenish the IPF (Investor Protection Fund) of BSE to the extent of Rs 1.86 crore and that of NSE by about Rs 2.58 crore.

According to the order, the four directors have to pay these amounts within 45 days from today. In case of failure to make the payments, they would be barred from the capital market for "further ten years".

At present Sunchan Securities is under liquidation.
In December 2010, Sebi had cancelled the certificate of registration of Sunchan Securities to act as a stock broker after finding that it violated various regulations.
Following complaints against Sunchan Securities, Sebi had asked NSE and BSE to carry out a special purpopse inspection.
Among others, the inspection found that the entity misused clients' funds and securities, failed to redress grievances and did not maintain records.
Subsequently, in January 2009, Sebi barred Sunchan, Sunil, Mansinghani, Kanchan Mansinghani, Ajay Janardan Kotwal and compliance officer Riyaz Ismail Shaikh from dealing in the capital market pending inquiry.

However, the direction against Ajay Janardan Kotwal was revoked later that year since he was found not be a director of Sunchan Securities. His name had erroneously appeared in the papers filed by the company with the exchanges.
With regard to the seven year-ban from the capital market, the years already served by the individuals since January 2009 would be taken into account.