Markets regulator SEBI has directed Avadhut Sathe Trading Academy Pvt Ltd (ASTAPL) and its founder, Avadhut Sathe, to refund Rs 546.17 crore collected from participants for providing unregistered investment advisory and research analyst services. The refund will also carry interest of Rs 67.87 crore, according to the regulator's final order dated Friday.
SEBI has barred the academy and Sathe from accessing the securities market for two years or until they comply with the refund direction, whichever is later. The regulator has also imposed a combined penalty of Rs 11.5 crore on the academy, Sathe and Gouri Avadhut Sathe for violations of securities market regulations.
The penalty comprises Rs 6 crore on the academy, Rs 4 crore on Avadhut Sathe and Rs 1.5 crore on Gouri Avadhut Sathe.
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In its 171-page order, SEBI found that the academy and its founder had provided investment advice and research recommendations through paid programmes, sessions and WhatsApp groups without the necessary registrations.
The regulator also flagged promotional representations about returns that it found misleading and said investment advice was offered without assessing whether the recommendations were suitable for the recipients.
According to the order, the academy and Sathe had collected around Rs 601.38 crore from course participants since the business began. However, based on the evidence examined, SEBI identified Rs 546.17 crore in fees attributable to the programmes covered by its findings and directed that the amount be disgorged and refunded.
The academy and Sathe have been given five months from the receipt of the order to complete the refunds. They must also publish newspaper notices within 30 days, setting out the procedure through which participants can claim their money.
SEBI has further directed that debit transactions from their bank accounts remain frozen until the required amounts are deposited into the designated account and the regulator's Investor Protection and Education Fund, wherever applicable.
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The restrictions and refund directions are aimed at addressing the amounts collected through the activities identified in the order.
SEBI has separately barred Gouri Avadhut Sathe from accessing the securities market for six months. The regulator attributed her liability to a failure to exercise adequate oversight.
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