S. Raman, Whole Time Member. Case: In Re: Secure Success Plan Private Ltd. and Ors. Vs. Securities and Exchange Board of India
| Case Number | S. Raman, Whole Time Member |
| Judges | WTM/SR/SEBI/SRO-BLO/02/01/2017 |
| Issue | Securities And Exchange Board Of India Act, 1992 - Sections 11, 11(1), 11(4), 11B, 11D, 12(1), 19 |
| Judgement Date | January 19, 2017 |
| Court | Securities and Exchange Board of India |
Order:
S. Raman, Whole Time Member
1.1 Securities and Exchange Board of India ('SEBI') received a reference from Reserve Bank of India (RBI) vide letter dated August 07, 2015 regarding fund mobilization by Secure Success Plan Pvt. Ltd. (hereinafter referred to as "Secure Success Plan"/the Company) from the public by opening "Risk free Management Account". RBI also forwarded a complaint (dated July 03, 2015) filed by one Mr. Sanjeev Kumar Tyagi, wherein it was inter alia alleged that:
"• The complainant deposited an amount of Rs. 20,000 in "Risk Free Management Account" of Secure Success Plan, wherein they offered 5-8% monthly bonus on the investment,
• Secure Success Plan failed to refund the principal amount and the assured bonus to the complainant, despite repeated requests for refund by the complainant."
1.2 RBI vide the aforesaid letter dated August 07, 2015, forwarded Brochures, etc. issued by Secure Success Plan. RBI, vide the said letter also informed that:
"• Secure Success Plan is not registered with RBI as an NBFC,
• On an incognito visit to the office of Secure Success Plan by RBI officials, it was found that the company is in the business of trading in shares and that they are accepting public deposits by opening "Risk Free Management" Account,
• The entity is promising returns of 5- 8% per month. The company officials informed that an investor would get Rs. 5000/- per month for investment of Rs. 1 lakh,
• Further, the entities, viz. M/s. Secureji Broking Pvt. Ltd. and M/s. Secureji Commodities Pvt. Ltd. are having their office at the same premises as that of Secure Success Plan and the directors are common among these entities,
• The directors of Secure Success Plan are appointed as additional directors of Sri Bheemeswara Securities Pvt. Ltd. (a Member of National Stock exchange)."
1.3 Thereafter, SEBI received several other complaints against Secure Success Plan inter alia alleging that:
a. Secure Success Plan along with its sister concerns, i.e. Secureji Commodities Pvt. Ltd. Secureji Broking Pvt. Ltd. and Sri Bheemeswara Securities Pvt. Ltd. cheated more than 400 investors in Bangalore promising returns from investment into stock market through auto trading,
b. Based on the promise made by them (Secure Success Plan and its Director, Mr. Shreyas Manjunath) to offer guaranteed returns from investment plan, large sums were invested by the complainants. However, on request of refund, Secure Success Plan failed to refund even the invested amount.
2.1 Thereafter, SEBI obtained information regarding Secure Success Plan, its directors, group companies, etc. from the Facebook account, websites operated by Secure Success Plan, Secureji Commodities Pvt. Ltd., Secureji Broking Pvt. Ltd. and Sri Bheemeswara Securities Pvt. Ltd. and also from Registrar of Companies (RoC).
2.2 As part of the preliminary enquiry, SEBI vide letter dated February 24, 2016, advised Secure Success Plan to furnish the following information/documents in connection with its various financial products/services in the nature of portfolio management:
"a. Registered/Corporate addresses of Secure Success Plan along with contact numbers,
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Name address and contact numbers of all of its promoters/directors,
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The list of all the securities/investment activities undertaken by Secure Success Plan,
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Since when the entity is in the business of portfolio management services,
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Year-wise details in a tabular format of:
* No. of clients to whom they have provided services,
* Total amount of money collected from the aforesaid clients during the year,
* Total asset under Management (AUM) on December 2015,
* Total amount of money deployed as on December 2015.
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Break up of A UMs under various asset classes,
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List of clients and minimum amount accepted for managing their portfolio, h. The details of fee charged for various products/services offered,
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Details of guaranteed return scheme, if any offered by them,
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Details of investment advice services, if any offered by them,
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A copy of the audited annual accounts for last three financial years.
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Whether Secure Success Plan has sister concerns registered with SEBI as intermediary. If yes, details of the transactions, if any placed through such intermediaries."
2.3 SEBI, vide the aforesaid letter, also forwarded the copies of the complaints received by SEBI against Secure Success Plan. SEBI also advised them to redress the said complaints. The copies of the said letters were also forwarded to Secureji Broking Pvt. Ltd. and Secureji Commodities Pvt. Ltd. As no reply was received from them, a reminder was issued to the aforesaid entities vide SEBI's letter dated March 15, 2016.
2.4 Thereafter, Secure Success Plan vide their letter dated March 12, 2016 (received by SEBI on March 16, 2016) stated:
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"Funds were never collected for portfolio management or to give the returns from stock market, but there were running investments which were collected and used for property purchase, real estate venture, etc.
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Public funds were never collected in any of our companies name, it was only collected in the personal levels of director's accounts.
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Secure Success Plan is into the business of providing recruitment and placement, selecting, interviewing and employing all types of executives, middle management staff, Junior Level Staff, Workers, Labourers, Skilled/unskilled required by various industries.....
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There were no sister concerns having registered with SEBI and they do not offer any guaranteed return scheme."
2.4.1 In respect of the complaint filed by Mr. Sanjeev Kumar Tyagi, mentioned in Paragraph No. 1.1 above, the company provided (vide the aforesaid letter dated March 12, 2016) the statement by one of its directors, viz. Mr. Shreyas Manjunath, wherein he states:
He [Sanjeev Kumar Tyagi] is not a client to any of our companies, he is known to me personally from online Facebook. And at the being of career as a helping friend, on 20/07/2012 he lend Rs. 20,000/- into my ICICI Account Number:........name: Shreyas M. Account Type: Savings Account. Latter I tried several times to his cell phone number....but he was not available. Later I deposited Rs. 1430/- on 21/09/2012 and rs. 1395 on 18/10/2012 as part payment to his account No.....with PNB Bank, Muzaffarnagar. But meanwhile, Sanjeev Kumar misunderstood and started sending e-mails to me and my staffs damaging my reputation....I paid Rs. 20,000 -full payment to him and apologized for the delay in returning the loan amount. By that time, he gave written complaints to RBI and other agencies. An on my request, he gave a letter to me and to RBI by saying that he was misguided. He requested to withdraw his complaint. It is not true that I received Rs. 20,000 as a deposit for my business
2.4.2 In respect of complaint filed by one Mr. Safdar Raza Riyaz Ali (forwarded to the company by SEBI vide letter dated February 24, 2016), the aforesaid director, viz. Mr. Shreyas Manjunath states:
We will be settling the dues before April 2016.
2.4.3 Secure Success Plan, vide the aforesaid letter, also furnished the following information/documents:
"a. Copy of the letter dated September 5, 2015 of Mr. Sanjeev Kumar (Complainant) addressed to RBI, wherein he inter alia requested to withdraw his complaint (dated July 3, 2015-mentioned at paragraph No. 1.1 above) against Secure Success Plan,
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Details of registered/corporate addresses,
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Names, addresses and contact numbers of its promoters and directors,
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Copies of audited annual accounts for the last three years"
2.5 In the meanwhile SEBI again received several complaints against Secure Success Plan and Mr. Shreyas Manjunath (one of the directors), alleging that they are not refunding the amounts deposited by the complainants in the plan/scheme offered by the company wherein they promised 5-8% monthly returns. The complainants also forwarded the copies of various letters sent by Secure Success Plan to them.
2.6 On analysing the Annual Returns for the period 2011-2012, 2012-2013, 2013-2014 furnished by Secure Success...
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