InvestorQ : Why has SEBI imposed a penalty of Rs.90 lakhs on defunct Anugrah Stock Broking?
Aashna Tripathi made post

Why has SEBI imposed a penalty of Rs.90 lakhs on defunct Anugrah Stock Broking?

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Aditi Sharma answered.
1 month ago
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SEBI has imposed a penalty of Rs.90 lakh on Anugrah Stock Broking for misusing Rs.119 crore worth of client funds. This order is based on an investigation done by SEBI jointly with NSE, BSE and CDSL. The allegation is that Anugrah deliberately did not segregate client funds and proprietary funds an made blatant misuse of the shares pledged by clients in good faith to the broker. Client shares were pledged to raise money for the firm.

In addition, the regulator has also noted that Anugrah gave loans to its group companies and associates out of these funds from clients. Even at the KYC level, SEBI found huge gaps as Anugrah had not uploaded correct and complete details. Anugrah has been suspended from trading since Nov-20. Directors have been instructed not to dispose any assets pending completion of the investigation.

The Anugrah and Karvy case led to SEBI doing away with the system of giving brokers direct access to client securities via power of attorney. The new system allows clients to pledge and re-pledge their holdings using an only depository interface.

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