The Securities and Exchange Board (SEBI) of India has imposed a penalty of ₹1.2 crore on Unitech Advisors (India) Pvt Ltd (now known as Auram Asset Management Private Ltd) and two of its directors, Ajay and Sanjay Chandra, for failing to wind up three real estate funds years ago, despite several extensions.
Besides, the market regulator in a late night Friday order also imposed a penalty of ₹10 lakh on Sanjay Chandra, Hitendra Malhotra, another director of the company, and Deepak Bajaj, a director at Unitech Realty Investors (India) Pvt Ltd and a nominee of Unitech Advisors on the investment committee of the fund house. That means, the total amount should be paid jointly and severally by them would be ₹1.20 crore, said SEBI.
SEBI has found a number of violations by the fund house including investing investors’ monies in its group companies, made bad investment decisions, and still not returned the money of a majority of its investors.
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They have also been barred from accessing the securities market either directly or indirectly for two years. Besides, these individuals have been barred associating themselves, directly or indirectly, with any SEBI registered intermediary, including SEBI registered funds such as Mutual Funds, AlternativeInvestment Funds, Portfolio Management Services, etc. which deal with investors’ money in any manner for two years.
A further penalty of ₹10 lakh (also to be paid jointly) has been imposed on Hitendra Malhotra and Deepak Bajaj for failure to redress investors‘ grievances.
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SEBI has also slapped a penalty of ₹10 lakh each on the fund house’s three trustees Vijay Tulshyan, Mahesh Kumar Sharma and Rakesh Dhingra. They were barred from taking new assignments as Trustees of Alternative Investment Fund of any category for a period of one year, SEBI order said.
“The direction for winding up and for providing exit to investors/unit holders does not preclude the investors/unit holders of the fund to pursue other legal remedies available to them under any other law, against the fund and/or the Noticees regarding their investment or deficiency in service before any appropriate forum of competent jurisdiction,” SEBI further said.