Market regulator Sebi today slapped a fine of Rs 16 lakh on Indira Securities for allegedly not complying with the stock broker norms.
In its order, the Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 16 lakh on Indira Securities for violating code of conduct specified under stock brokers regulations.
It was alleged that Indira Securities failed to settle the running accounts of its clients on quarterly basis as required by Sebi's norm.
Sebi, in December 2009, issued a framework where a client specifically authorises the stock broker to maintain a running account, the actual settlement of funds and securities shall be done by the broker, at least once in a quarter or month, depending on the preference of the client.
The stock brokers were required to ensure its full compliance in respect of all clients by March 31, 2010
According to Sebi, "noticee (Indira Securities) has thereby admitted that they had not started quarterly or monthly settlement of funds and securities till January 2013."
Moreover, the company did not even settle the credit balance running accounts that were lying dormant for more than six months, it added.
An analysis of accounts from January 2013 revealed that the running account settlement of the clients on quarterly basis had been started for the dormant accounts only and where the credit balance was lying continuously for over 180 days.
In fact, Sebi noted that Indira Securities has not made even the preliminary basic efforts to comply with Sebi's direction issued in 2009.
"The noticee has failed to adhere to the prescribed code of conduct in respect of high standard of integrity, promptitude, fairness, due skill, care and diligence," Sebi.
In a separate order today, Sebi has disposed of the proceedings against former promoter of Bloom Dekor Ramesh Shah in a case related to violation of disclosure norms with respect to shareholding in the company.
"I find that the matter in respect of Late Ramesh Shah initiated...Cannot be proceeded with as the noticee (Shah) has passed away on October 4, 2013 and thus the matter becomes infructuous and adjudication proceeding cannot be proceeded with," Sebi said in the order.
The regulator after examining certain documents in 2011 had observed that the promoters of Bloom Dekor including Shah had violated disclosure norms three times during the year 1998-2000.
However, it was informed to Sebi by one of the promoters of Bloom Dekor, that Shah had expired and requested the market regulator to remove his name from the proceedings.
