Sebi levies Rs 80 lakh penalty on DS Capital, its directors for flouting regulatory norms

Capital markets regulator Sebi on Tuesday levied penalties totalling Rs 80 lakh on DS Capital Venture and its directors for violating regulatory norms.

Sebi has slapped a fine of Rs 20 lakh on DS Capital and Rs 15 lakh each on its directors — Sanjay Sheshmani Dwivedi, Sanjay Kumar Dwivedi, Piyush Kumar Sharma, Deepali Sharma and Abhishek Tiwari.

DS Capital Venture (DS Capital) is registered as an Sebi-investment adviser (IA).

As on December 2020, there were complaints on the SEBI Complaints Redress System (SCORES) pending against DS Capital for more than 6 months.

Accordingly, an inspection of DS Capital was approved by Sebi and thereafter it issued a show cause notice to the company and its directors in August 2021.

Sebi in its inspection found that complaints against DS Capital through SCORES platform indicated false assurances, assured returns, advisory services related grievances, loss of funds, cheating etc.

It also noted that despite sending reminders to DS Capital, the concerns of complainants submitted through SCORES have not yet been resolved.

In addition, the conduct of DS Capital regarding mis-selling of securities or services relating to the securities market, providing assured returns and making a false or misleading statement, and concealing information from the investors have violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.

The regulator also observed that DS Capital and its directors were required to communicate and cooperate with the investigating authorities and inform about the preservation and maintenance of documents and records at the inspection stage only.

However, by not replying and not furnishing documents, DS Capital and its directors have failed in their duty, thereby violating the IA (Investment Advisers) regulations.

Earlier, in an order in December 2022, Sebi had restrained the DS Capital and its directors from accessing as well as dealing in the securities markets for a period of five years from the date of that order.

The regulator also prohibited Dwivedi, Tiwari, Piyush Kumar Sharma and Deepali Sharma from holding any managerial position or associating themselves with any intermediary registered with Sebi, in any capacity for a period of five years.

Further, it directed DS Capital to resolve the complaints pending against it on the SCORES within the period of 30 days from the date of the order and if the company does not comply with the directions, then it shall be restrained from securities markets for an additional period of three years.