In a separate order, Sebi said it has also cancelled the registration certificate of Rajkumar C. Basantani as stock broker, who, apart from being a director of Kolar Sharex, was also a trading member of the National Stock Exchange (NSE).
Sebi noted that Kolar Sharex was having membership of BSE and Inter Connected Stock Exchange (ICSE) before it was expelled from the exchanges in October 2014 pursuant to a decision of the disciplinary action committee (DAC) of the BSE, which had noted various irregularities by Kolar Sharex.
Besides, Sebi noted that various regulatory and enforcement actions had been taken by Sebi against the firm’s director–Rajkumar C. Basantani.
Various other regulatory/enforcement actions had been taken by Sebi against Basantani in his capacity as a stock broker, as an individual and as a director of various companies. which included suspension of certificate of registration as trading member, debarment as an individual, imposition of monetary penalty in the capacity of proprietor and individual, prosecution proceedings for failure to pay the monetary penalty and recovery proceedings for recovering the amount of penalty due to be paid.
The regulator appointed a designated authority (DA) which found various violations of Stock Broker Regulations by the firm and noted that Basantani had failed to comply with the fit and proper person criteria and had violated the conditions of grant of registration by failing to pay Sebi registration fees and had not complied with the provisions of code of conduct prescribed for the stock brokers, Sebi said in two separate orders.
Regarding the firm, Sebi said that any certificate of registration granted to a stock broker by Sebi is subject to the condition that he holds the membership of any stock exchange. However, the firm has already been expelled from the exchanges with effect from October 20, 2014.
It also failed to obtain prior/post approval from Sebi or BSE for change in control of the management, which amounted to non-compliance with market norms.
The regulator thus cancelled the registration certificates of the entities through two separate orders, in agreement with the recommendation of the DA that the certificate of registration be cancelled.