Market regulator Sebi has directed Wasankar Wealth Management and its related entities to refund, within seven days, the money collected from public along with the interest rate.
The Securities and Exchange Board of India (Sebi) also barred these entities from mobilising funds from public as well as from offering any portfolio management activities or any other unregistered activity.
The regulator found that Wasankar was collecting funds from public for making investment in securities market without registering as an intermediary with Sebi.
It further said "Wasankar Wealth Management Ltd (WWML) and Wasankar Investments (WI) that were in the nature of portfolio management schemes without obtaining registration as a portfolio management services."
Consequently, Sebi in its interim order passed yesterday, directed Wasankar Wealth Management, Wasankar Investments, Prashant Wasankar, Vinay Wasankar, Mithila Wasankar, Abhijit Wasankar and Bhagyashree Wasankar "to cease and desist from undertaking the portfolio management activities or any unregistered activity in the securities market, directly or indirectly, in any manner whatsoever."
It asked them to refund the money collected from their clients and other investors in its various schemes "alongwith income, profits or returns promised to them under such schemes or interest at the rate of 10 per cent per annum, whichever is higher from the date of investment till the date of refund, within a period of seven days (i.E., by September 3, 2014) and submit a repayment report to Sebi."
Sebi also restrained these entities from dealing in the securities market till further directions. It also prohibited them from transferring the funds mobilised from investors or from disposing of any asset for purposes other than refund.
The regulator said that there was huge mismatch in the data provided by the company with regard to the number of clients and the fee collected from them.
"Prior to inspection, WWML had submitted that it had collected fee amounting to Rs 16.02 crore from 2,560 clients." it said.
The direction comes after Sebi received complaints stating that WWML and WI are collecting money from public in Nagpur promising a return of 300 per cent on an investment for 48 months, a return of 250 per cent on an investment for 30 months and a return of 125 per cent on an investment for 12 months.
