Anugrah Stock & Broking: Bombay HC Appoints Court Receiver; Bars Directors from Leaving Country
Moneylife Digital Team 19 September 2020
The Bombay High Court has appointed a court received for all fixed assets of Anugrah Stock & Broking Pvt Ltd, while asking directors of the brokerage as well its sub-broker Teji Mandi Analytics Pvt Ltd, not to leave the HC jurisdiction or country without permission.
 
Fixed assets disclosed by Anugrah Stock and Broking includes its offices at Ahmedabad, two adjoining flats in Mumbai, two office premises at Jogeshwari’s Lotus Corporate Park, two BMWs, including one sports model, and one Mercedes-Benz.
 
However, while hearing more than 60 petitions against the broking house, Justice Gautam Patel expressed surprise at the value of the assets disclosed, which comes to just over Rs35 crore. “I am not persuaded that this is an accurate listing at all. It seems unreasonable to me that a company which was doing high-value business till recently would keep so little in stocks [shares]. There is a large number of bank accounts but most of these have a nominal balance,” the judge pointed out in the order.
 
The list of assets was submitted by Paresh Kariya, director of Anugrah Broking to the HC. It also lists other items including office furniture and equipment, as well as air-conditioners, computers, and printers. 
 
As per a report from Mumbai Mirror, Anugrah has also disclosed certain financial assets, such as shares of a few companies and over 60 bank accounts. However, the value of all the shares put together is shown as under Rs7 lakh and except two bank accounts, which hold Rs6 crore and Rs5 crore, all other accounts either have zero balance, or the amount held is under Rs14,000.
 
While observing that the assets listed by Anugrah are way too below than the claims submitted by petitioners, which would be about Rs100 crore, the Bombay HC says, the court received will take symbolic possession of all assets listed by the brokerage. While the directors of Anugrah may use flat and cars, they cannot do any transaction related with these asset as listed, the court clarified. 
 
As per the news report, senior advocate Birendra Saraf, advocate Kamal Bulchandani, who has his own money stuck and is representing certain investors as well, and advocate Aditya Mehta appearing for a few petitioners sought an injunction from the court on all the assets mentioned in the affidavit.
 
"They pointed out a few cases where the balance mentioned against their names in the demat accounts had depleted even after the National Stock Exchange (NSE) had barred Anugrah from carrying out any trades in certain segments of the market. Senior counsel Saraf also pointed out that it was not only relatively big investors who had put their money through Anugrah and are now stuck, but also a good number of senior citizens and pensioners, who had put in their life savings," the report says.
 
The court, taking their submissions into account, and after going through Anugrah’s affidavit, asked as to why an injunction order should not be passed and court receiver appointed across all its assets, including those bank accounts. Responding to this, Rohan Cama, counsel for Anugrah informed the bench that the brokerage's bank accounts were frozen by the Securities and Exchange Board of India (SEBI). He told the court that Anugrah would not transact in any of the bank accounts listed in the affidavit, without prejudice to his rights and contentions.
 
Earlier this month, the Bombay HC had barred crisis-hit Anugrah Stock and Broking from using assets worth Rs58 crore that belong to more than 25 investors, who filed a petition after the firm has stopped responding to them and their accounts have become inaccessible. 
 
Justice Gautam Patel, in his interim order, had asked the brokerage not to use assets of its investor-clients for its ordinary and usual course of business. It is learnt that advocate Rohaan Cama, representing Anugrah Stock & Broking, offered to disclose all movable, immovable and financial assets of the brokerage firm, along with details of any encumbrance on them. 
 
Hundreds of investors have lost large sums of money, with one south Mumbai-based family alone having invested over Rs150 crore. So, the number of litigants is likely to swell, unless other investors seek other options. 
 
The bulk of investors in Anugrah have come through an associate firm called Teji Mandi Analytics, which was apparently running a derivatives portfolio of over Rs1,000 crore like a Ponzi scheme with assured monthly returns. 
 
On 4th September, the National Stock Exchange (NSE) had withdrawn all trading rights of crisis-hit Anugrah Stock and Broking Pvt Ltd. Earlier on 1st September, the stock exchange had withdrawn Anugrah's trading rights in future & options (F&O), currency derivatives and commodity derivatives segment.
 
In a circular, NSE says, "On account of the regulatory concerns observed, the relevant authority of Exchange has decided to withdraw the trading rights of the member in all segments of the Exchange with immediate effect. Accordingly, in addition to the aforementioned segments, Anugrah Stock & Broking Pvt Ltd shall also be disabled in all other segments of the Exchange from 4 September 2020 before market hours."
 
Anugrah Stock and Broking, which won a reprieve from Securities Appellate Tribunal (SAT) on 17th August, was unable to deposit Rs165 crore with the NSE by 1st September. The Exchange then withdrawn its trading rights and also seized its computers and books, the brokerage firm has told investors thronging to its office. 
 
Last week, the economic offences wing (EOW) of Mumbai Police has registered a case of cheating against the troubled stock-broking house, Anugrah Stock & Broking Pvt Ltd, for duping an investor of Rs8 crore. As Moneylife has reported in the past, the extent of investor losses in Anugrah could be as high as Rs1,000 crore and investigators have confirmed that more complaints having been subsequently coming to the EOW.
 
The case was registered by Ashutosh Shah at Juhu police station against the firm’s director Paresh Kariya, and Kalap Shah and Anil Gandhi of Teji Mandi Analytics and others, under criminal breach of trust and criminal conspiracy. However, no arrests have been made yet. 
 
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Comments
anilkk65
1 year ago
Why you did not switch to short/medium/long term GSec funds, if the fear was just corporate loan default.
joydalia.co
1 year ago
Paresh has squarely blamed Kalapi and Edelweiss in his affidavit...
kpushkar
1 year ago
Wow .. 150 cr from a South mumbai family.. seems too casual approach here or may be the inherited money.. For a change lawyers are also involved in loss here. Hopefully it can lead to some better law implementation in time
India is indeed land of opportunities .
s5rwav
1 year ago
Just Wonder whether the Financial Fraudsters already Left India to Other Countries that are Safe for these Financial Fraudsters? I am Babubhai Vaghela from Ahmedabad. Thanks.
s5rwav
1 year ago
Why EOW of Mumbai Police Not Arrested the Accused is a Question. I am Babubhai Vaghela from Ahmedabad. Thanks.
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