Former directors of HBJ Capital Services have settled with markets regulator Sebi a case of alleged violation of investment adviser and alternative investment funds norms, by paying over Rs 1.5 crore towards settlement charges.
The former directors of the firm are Gokulraj Ponnuraj and Arunmozhi Gopalan.
The settlement orders come after Sebi observed that HBJ Capital had issued various advertisements in press and its official websites giving stock tips to investors under various schemes.
"HBJ Capital was seen assuring guaranteed returns on execution of stock tips. Various advertisements, etc., prima facie indicated that activities of HBJ Capital were in the nature of offering financial advisory services to the clients," Sebi said.
The former directors were alleged to have violated provisions of Investment Advisers and Alternative Investment Funds regulations.
However, while the proceedings were pending, Ponnuraj and Gopalan filed settlement application with the regulator without admitting or denying the guilt and proposed to pay over Rs 86.06 lakh and Rs 71.71 lakh, respectively.
The amount, after the approval of panel of whole-time members of Sebi, was remitted by the former directors in September 2019.
Accordingly, the pending adjudication proceedings initiated against the applicants have been disposed of.
Besides, the regulator said enforcement actions including commencing of proceedings can be initiated if any representation made by the former directors in the settlement proceedings is subsequently discovered to be untrue.
In June 2015, Sebi barred HBJ Capital Services and its directors from acting as investment adviser and alternative investment fund for providing unauthorised investment tips to investors.
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