Bombay High Court: Investors Plead for Multi-Agency Special Investigation Team Probe into Rs1,300 Crore Anugraha Scam
Moneylife Digital Team 14 October 2020
In a petition before the Bombay High Court, hundreds of investors of Anugrah Stock & Broking Ltd have come together to demand the setting up of a multi-agency special investigation team so that the assets are consolidated and auctioned efficiently. The petition has made the National Stock Exchange (NSE), the NSE Clearing Corporation and Edelweiss Custodial Services as respondents. 
The petitions (CRI WPST/2876/2020 and CRI WPST/2878/2020) were listed before Justice SS Shinde and Justice MS Karnik on 13 October 2020. The high-profile case had advocate Yusuf Iqbal Yusuf representing several hundred investors who have come together to try and recover their money. The amount involved and believed to be lost exceeds Rs1,300 crore. Moneylife has covered the details of this case extensively. Our articles can be read here:
Following a detailed hearing, the Bombay High Court, while hearing the Anugrah Stock & Broking Pvt Ltd fraud case, has asked the public prosecutor to submit status report on investigation being carried out by economic offences wing (EOW) of Mumbai police and the enforcement directorate (ED).
During the hearing, senior counsel Amit Desai, representing NSE, contended that there was no need to implead NSE in this matter. However Adv Yusuf submitted that NSE had the investor protection fund (IPF) which cover losses for investors up to Rs25 lakh per investor and urged the Exchange to be asked to release this amount immediately so that relief can be provided to the small investors. 
Appearing for Edelweiss Custodial Services Ltd, counsel Sameer Pandit claimed that Edelweiss Custodial Services was not a party to the fraud, had no contractual relations with investors of Anugrah and, therefore, investors should opt for arbitration. 
Similar objection was raised by senior counsel Venkatesh Dhond, representing NSE Clearing Ltd. 
However, advocate Yusuf pointed to a circular, issued by SEBI (Securities and Exchange Board of India), which explains the role of the depository and clearing member in ensuring that individual securities are not sold for meeting other obligations.
After the hearing, the bench posted the matter for 19th October, while asking the PP (public prosecutor) to submit status report of EOW and ED investigations.
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 had withdrawn its trading rights and also seized its computers and books, the brokerage firm has told investors thronging to its office. 
Last month, the 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.


3 years ago
let us form an investors association cheated by karvy, and file a case against them in High court, otherwise they will siphon off the Assets, and investors will be left with nothing.
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