WTM/SR/SEBI/MIRSD/ 04/01/2016

SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER
Under Section 11(1), 11(4), 11B and 11D of the Securities and Exchange Board of India
Act, 1992 in respect of Mr. Sameer S. Joshi, Proprietor, Shreesurya Investments (PAN
ABSPJ5397C and Mr. Sameer S. Joshi (HUF): AAPHS5352A)
1. Mr. Sameer S. Joshi, Proprietor, Shreesurya Investments ("Mr. Sameer Joshi") was a
registered Sub-broker of BSE Limited having Registration number INS013981613 from June
19, 2007 to December 27, 2013. Mr. Sameer Joshi was also a Sub-broker of the National
Stock Exchange of India Limited having Registration number INS235376014 from May 06,
2008 to November 01, 2013. Mr. Sameer Joshi was affiliated to the stock broker, M/s Kisan
Ratilal Choksey Shares and Securities Private Limited ("Stock Broker").
2. Securities and Exchange Board of India ("SEBI") received several complaints during the
year 2013 against Mr. Sameer Joshi, inter alia, alleging the following:
i.

Promised the investors in Nagpur to double their money within 15-28 months or pay
50% interest rate per annum on quarterly basis, and also providing free foreign trips

ii.

Funds were collected

by the group through agents, chartered accountants and

lawyers.
iii.

These amounts were deposited in the HUF account of the Mr. Sameer Joshi or
Shreesurya Investments' Account with Axis Bank.

iv.

Shreesurya Investments collected more than Rs. 5000 crores from 6000 investors.

v.

Shreesurya Investments neither paid interest nor repaid the principal amounts.

3. Upon preliminary enquiry by SEBI, it was observed that Mr. Sameer Joshi by misusing the
certificate of registration granted as Sub-broker, solicited and collected money from the
members of public promising them high returns. As a Sub-broker, Mr. Sameer Joshi was also
an agent of the Stock broker. It was also observed that Mr. Sameer Joshi indulged in fundbased activities involving his personal financial liability by virtue of collection of money.
4. As the aforesaid activities of Mr. Sameer Joshi were prima facie in violation of the provisions
of the SEBI Act, 1992 ("SEBI Act"), Securities Contracts (Regulation) Rules, 1957 ("SCRR"),
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the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations,
1992 ("Brokers Regulations") and the SEBI (Prohibition of Fraudulent and Unfair Trade
Practices) Regulations, 2003 ("PFUTP Regulations"), SEBI passed an ad interim ex-parte
order dated January 20, 2015 ("Ex-parte Order") against Mr. Sameer Joshi with the
following directions:
(i) "prohibited Mr. Sameer S. Joshi from mobilizing or pooling funds from its clients, other general
investors or public or any other unregistered activity, in whatever form;
(ii) directed Mr. Sameer S. Joshi to immediately withdraw and remove all advertisements,
representations, literatures, brochures, materials, publications, documents, websites, etc. in
relation to the promising high returns or any unregistered activity in the securities market;
(iii) directed Mr. Sameer S. Joshi to refund the monies so collected from his clients and other
investors in the various schemes along with income, profits or returns promised to them under
such schemes or interest at the rate of 10% per annum, whichever is higher, from the date of
investment till the date of refund, within a period of seven days from the date of this order (i.e.,
by January 27th, 2015) and submit a repayment report to SEBI in the following format:
S. No.

Name of
Client /
Investor

PAN of
Client /
Investor

Address of
Client/
Investor

Refund Details
From
Cheque No./
Demand Draft/
NEFT details

To
Name of the
Bank

Amount

Cheque No./
Demand Draft/
NEFT details

(iv) prohibited Mr. Sameer S. Joshi from transferring the funds/deposits mobilised from the clients
or other investors or from disposing of or alienating any asset that has been created from the
funds/deposits received from their clients or other investors for purposes other than refund as
directed hereinabove;
(v) restrained Mr. Sameer S. Joshi (PAN: ABSPJ5397C) from buying, selling or dealing in the
securities market, either directly or indirectly, in any manner whatsoever, till further directions."
5. The said ex-parte order provided that Mr. Sameer Joshi may file his objections, if any, within
twenty one (21) days from the date of receipt of the said interim order. The order further
provided that Mr. Sameer Joshi may avail an opportunity of personal hearing before SEBI
on a date and time to be fixed on a specific request in writing.
6. Since Mr. Sameer Joshi was in judicial custody, the ex-parte order was sent to him vide letter
dated January 21, 2015, through the Superintendent, Nagpur Central Prison, Nagpur. The
same was duly acknowledged by Mr. Sameer Joshi.

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7. In response, Mr. Sameer Joshi vide letter dated February 10, 2015 stated as under:
"In this context, I wish to state that I am lodged in Central Jail, Nagpur since more than a year.
Besides all the records pertaining to the matter and the office premises are sealed and I have no access to
any papers.
In view of the above reason and in the interest of justice, I will not be able to furnish any reply till I am
released and sufficient time is provided so as to enable me to give a proper reply".
As per the information furnished by the Economic Offences Wing, Nagpur, it is
observed that a First Information Report was registered against Mr. Sameer Joshi and his
wife Ms. Pallavi Joshi on September 14, 2013 under the Maharashtra Protection of
Investors Deposit Act, 1999.
8. Thereafter, an opportunity of personal hearing before me was granted to Mr. Sameer Joshi
on May 12, 2015 through a notice of hearing dated March 30, 2015. The notice of personal
hearing was served through the Superintendent of Jail, Nagpur, vide letter dated March 30,
2015. However, Mr. Sameer Joshi did not avail the opportunity of personal hearing. Another
opportunity of personal hearing was granted to Mr. Sameer Joshi on July 01, 2015 through a
notice of hearing dated June 05, 2015 to appear before SEBI in person or through his
authorised representative. The notice of personal hearing was served through the
Superintendent of Jail, Nagpur, vide letter dated June 05, 2015. Neither Mr. Sameer Joshi nor
his authorised representative attended the personal hearing or filed any reply till date.
9. Considering that no reply has been received from Mr. Sameer Joshi, despite sufficient
opportunities granted to him and also considering the fact that Mr. Sameer Joshi failed to
avail the opportunity of personal hearing , I am constrained to proceed on the basis of the
material available on record against Mr. Sameer Joshi.
10. I shall now proceed to deal with the charges alleged against Mr. Sameer Joshi. In the instant
case, the issue for consideration is whether Mr. Sameer Joshi has indulged in fund based
activities by virtue of collection of money, in violation of Section12(1) of the SEBI Act, Rule
8(3)(f) of the SCRR and Clauses A(1), (2) and D(4) of the Code of Conduct for Sub-brokers
read with Regulation 15 of the Stock Brokers and Sub-brokers Regulations, Section 12A (a)
(b) and (c) of the SEBI Act and Regulation 3 (b), (c) and (d) and Regulation 4(1) and 4(2) (k)
of the PFUTP Regulations.

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11. On an examination of the material available on record, the following are observed:
i.

During the relevant period, Mr. Sameer Joshi was a SEBI registered Sub-broker
(details are mentioned at paragraph 1) affiliated to the Stock broker, M/s Kisan
Ratilal Choksey Shares and Securities Pvt. Ltd.

ii.

Apart from Shreesurya Investments, Mr. Sameer Joshi has floated 10 other
companies viz., "Shreesurya In-tech Pvt. Ltd., Shreesurya Softdrinks Pvt. Ltd., Shreesurya Infra
Projects Pvt. Ltd., Shreesurya Diary and Farm Pvt. Ltd., Shreesurya Cafe Retail Pvt. Ltd.,
Shreesurya Oil and Extractions Pvt. Ltd., Shreesurya Media Network Pvt. Ltd., Shreesurya
Wealth Risk Advisory Pvt. Ltd., Shreesurya Supermarkets Pvt. Ltd., Shreesurya Dreams
Destinations Pvt. Ltd." As per the information received and details available at the
website of the Ministry of Corporate Affairs, Mr. Sameer Joshi and one Mr. Manoj
Tatwadi together hold 100% voting rights in Shreesurya In-tech Limited and are also
its directors since inception. Mr. Sameer Joshi and his wife Ms. Pallavi Joshi have
100% voting rights in each of the remaining companies and are directors of the said
companies since inception.

iii.

Mr. Sameer Joshi had mobilised money from depositors/investors as fixed deposits,
recurring deposits, etc. These are shown as 'unsecured loans' in the balance sheet of
Shreesurya Investments. Funds mobilised from various investors are as under:
Table 1
Sl. No.

iv.

As on

No. of investors

Total amount collected (Rs.)

March 31, 2010

934

21,30,27,957

March 31, 2011

1762

42,02,28,228

March 31, 2012

1930

56,73,35,157

Mr. Sameer Joshi, also operated various schemes as shown below. For example, as
per one of the schemes FDR Scheme doubles in 24 months, with a minimum
investment of `50,000/-, the investor has the option of receiving quarterly interest of
12.5% or half yearly of 25%.

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Table 2 - Schemes of Shreesurya Investments

Sl. No.

Name of the scheme

Investment

Options

Amount to be received

amount (`
`)
1

FDR Scheme doubles in

24 months

Minimum
50,000

Quarterly (12.5%) and half

yearly (25%) Interest may be
obtained as option

Double of the amount

invested

FDR Scheme doubles in

19 months

1,00,000 5,00,000

No quarterly interest and

premature withdrawals

Double of the amount

invested

FDR Scheme doubles in

18 months

6,00,000 10,00,000

No quarterly interest and

premature withdrawals

Double of the amount

invested

FDR Scheme doubles in

17 months

11,00,000 and
above

No quarterly interest and

premature withdrawals

Double of the amount

invested

FDR Scheme doubles in

30 months

1,00,000 and
above

Premature notice period for 6

months

Double of the amount

invested

FDR Scheme doubles in

6
Months

1,00,000 and
above

Nil

Principal +15% interest

on Principal

FDR Scheme doubles in

3 months

1,00,000 and
above

Nil

Principal +6% interest

on Principal

v.

Mr. Sameer Joshi issued to the

investors/clients deposit receipts described as

"Promissory note". The details of the said "Promissory note' issued to one of its
investors/clients by Mr. Sameer Joshi is reproduced hereunder:
"Shreesurya Investment herewith promises to pay to (name of investor) or Nominee a sum of Rs.
50,000/- (Rupees Fifty Thousand Only) per quarter as interest in Deposit of Rs. 4,00,000/(Rupees Four lac only) accepted in the name said as (name of investor) w.e.f. August 21, 2012
(Date of Deposit) for a period of 24 months and further promises to pay Rs. 4,00,000/(Rupees Four lac only) on the date August 21, 2014 (Maturity Date) as an amount of
Deposits".
vi.

There are eight bank accounts opened in the names of Shreesurya Investments and
Mr. Sameer Joshi with his PAN, i.e. ABSPJ5397C.

vii.

The credits in these bank accounts for the period April 01, 2008 to September 30,
2014 amount to `30 crores (approximately). Out of these, there were 135 instances
of cash deposits amounting to `3.05 crores.

12. In the light of the facts mentioned above and also from the complaints by the
clients/investors of Mr. Sameer Joshi, it is clearly established that Mr. Sameer Joshi was
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collecting money from the public by misusing the trade name granted as a Sub-broker. This
collection of money gives rise to pecuniary liability to those from whom the money has been
collected by Mr. Sameer Joshi. It is noted that Rule 8 (3) (f) of SCRR clearly prohibits such
activities.
12.1. In this context, Rule 8 (3) (f) of SCRR which deals with such pecuniary liability is
reproduced hereunder for reference:
Qualifications for membership of a recognised stock exchange.
8. The rules relating to admission of members of a stock exchange seeking recognition shall inter alia
provide that:
..............................................
(3) No person who is a member at the time of application for recognition or subsequently admitted as a
member shall continue as such if
..................................................................................................................
(f) he engages either as principal or employee in any business other than that of securities or commodity
derivatives except as a broker or agent not involving any personal financial liability, provided that .................................................
12.2. As per Rule 8 (3) (f) of SCRR, a member of the Stock Exchange is prohibited from engaging
in any business other than that of securities or commodity derivatives except as a broker or
agent not involving any personal financial liability. It is noted that the Sub-brokers are not
members of the stock exchanges. However, they are agents of the Stock broker. Therefore,
the said rule is applicable to the Sub-broker as well.
In view of the same, I find that Mr. Sameer Joshi has violated rule 8 (3) (f) of SCRR as
Sub-broker.
13. It is noted from the abovementioned facts at paragraph 11(v) that Mr. Sameer Joshi had
floated various schemes. By floating such schemes, it is alleged that Mr. Sameer Joshi
violated Section 12A (a) (b) and (c) of the SEBI Act read with Regulations 2(1)(c), 3 (b), (c),
(d), 4(1) and 4(2) (k) of the PFUTP Regulations.
13.1.The provisions, the contravention of which have been alleged in this case are reproduced
hereunder for reference:

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The SEBI Act, 1992 "Prohibition of manipulative and deceptive devices, insider trading and
substantial acquisition of securities or control.
12A. No person shall directly or indirectly (a) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed
in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the
provisions of this Act or the rules or the regulations made there under;
(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which
are listed or proposed to be listed on a recognised stock exchange;
(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon
any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a
recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations
made there under;"

The PFUTP Regulations, 2003

Definition of fraud Regulation 2(1)(c).
(c)fraud includes any act, expression, omission or concealment committed whether in a deceitful manner
or not by a person or by any other person with his connivance or by his agent while dealing in securities in
order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain
or avoidance of any loss, and shall also include
(1) a knowing misrepresentation of the truth or concealment of material fact in order that another person
may act to his detriment;
(2) a suggestion as to a fact which is not true by one who does not believe it to be true;
(3) an active concealment of a fact by a person having knowledge or belief of the fact;
(4) a promise made without any intention of performing it;
(5) a representation made in a reckless and careless manner whether it be true or false;
(6) any such act or omission as any other law specifically declares to be fraudulent;
(7) deceptive behaviour by a person depriving another of informed consent or full participation;
(8) a false statement made without reasonable ground for believing it to be true;
(9) the act of an issuer of securities giving out misinformation that affects the market price of the security,
resulting in investors being effectively misled even though they did not rely on the statement itself or
anything derived from it other than the market price.
And fraudulent shall be construed accordingly;
"3. Prohibition of certain dealings in securities
No person shall directly or indirectly
(a)
(b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed
in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of
the provisions of the Act or the rules or the regulations made there under;
(c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities
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which are listed or proposed to be listed on a recognized stock exchange;

(d) engage in any act, practice, course of business which operates or would operate as fraud or deceit
upon any person in connection with any dealing in or issue of securities which are listed or proposed to
be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and
the regulations made there under."
"4. Prohibition of manipulative, fraudulent and unfair trade practices
(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an
unfair trade practice in securities.
(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves
fraud and may include all or any of the following, namely:
(k) an advertisement that is misleading or that contains information in a distorted manner and which
may influence the decision of the investors; "
13.2. It is noted from the investor complaints and the schemes that Mr. Sameer Joshi had
misused his status as a Sub-broker and solicited and collected funds and deposits from them
through misrepresentation and allurement of high returns. In view of the same, I find that
Mr. Sameer Joshi has clearly devised a scheme which is 'fraudulent' as defined in Regulation
2(1)(c) of the PFUTP Regulations. It is therefore clear that Mr. Sameer Joshi has acted in
fraudulent and deceitful manner in violation of Section 12A (a) (b) and (c) of the SEBI Act
and Regulation 3 (b), (c) and (d) and Regulation 4(1) and 4(2) (k) of the PFUTP Regulations.
14. Mr. Sameer Joshi as a Sub-broker at the relevant time was duty bound to follow the
conditions of granting of certificate of registration and also to abide by the code of conduct
prescribed under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. The relevant
provisions are reproduced below:

The SEBI Act, 1992

Registration of stock brokers, sub-brokers, share transfer agents, etc
12. (1) No stock broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed,
registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other
intermediary who may be associated with securities market shall buy, sell or deal in securities except
under, and in accordance with, the conditions of a certificate of registration obtained from the Board in
accordance with the regulations made under this Act:

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The SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992

Code of Conduct for Sub-Brokers
" A. General
(1) Integrity: A sub-broker, shall maintain high standards of integrity, promptitude and fairness in the
conduct of all investment business.
(2) Exercise of due Skill and Care: A sub-broker, shall act with due skill, care and diligence in the
conduct of all investment business...

D. Sub-Brokers vis-a vis Regulatory Authorities

(4) Manipulation: A sub-broker shall not indulge in manipulative, fraudulent or deceptive transactions
or schemes or spread rumours with a view to disturbing market equilibrium or making personal gains."
Mr. Sameer Joshi by misusing the status as Sub-broker solicited and collected
money from the members of public through various fraudulent schemes as detailed at
paragraph 11(iv) promising them high returns. Hence, I find that Mr. Sameer Joshi failed to
maintain high standards of integrity, promptitude and fairness prescribed for a Sub-broker,
therefore violated Section 12(1) of the SEBI Act read with Clauses A(1), (2) and D(4) of the
Code of Conduct for Sub-brokers read with Regulation 15(1)(b) of the Brokers Regulations.
15. In view of the non-repayment to his clients/investors by Mr. Sameer Joshi, he is liable to
refund the money so collected from his clients and other investors in the various schemes
along with income, profits or returns promised to them under such schemes.
16. It is also noted that the Mr. Sameer Joshi failed to comply with the directions issued by SEBI
in the ex-parte order dated January 20, 2015. Mr. Sameer Joshi has not submitted the report as
directed in the ex-parte order indicating refund of monies collected from his clients and other
investors under various schemes. However, considering the fact that he is in judicial custody,
I am of the view that a fresh period of ninety (90) days for repayment of monies collected
from the clients from the date of this order can be granted to Mr. Sameer Joshi.
17. SEBI has been entrusted with the important mandate of protecting investors and
safeguarding the integrity of the securities market. In this regard, necessary powers have been
conferred upon it under the securities laws. It is, therefore, necessary that SEBI exercises
these powers firmly and effectively to insulate the market and its investors from the
fraudulent actions of any of the participants in the securities market, thereby fulfilling its legal

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mandate. A basic premise that underlines the integrity of securities market is that persons
connected with securities market conform to high standards of transparency, good
governance and ethical behaviour prescribed in securities laws and do not resort to
fraudulent activities. In view of the gravity of the violations perpetrated by Mr. Sameer Joshi
as brought in the foregoing paragraphs, I am of the opinion that persons such as Mr. Sameer
S. Joshi should not be allowed to have access to the securities market in view of the possible
danger to the investors at large.
18. In view of the foregoing, I, in exercise of powers conferred upon me by virtue of Section 19
read with Sections 11(1), 11(4), 11B and 11D of the SEBI Act do hereby pass the following
directions :
a) Mr. Sameer S. Joshi, Prop. Shreesurya Investments (PAN ABSPJ5397C and Mr.
Sameer S. Joshi (HUF): AAPHS5352A) are prohibited from mobilizing or pooling any
fresh funds from its clients, other general investors or members of public in whatever form;
b) Mr. Sameer S. Joshi, Prop. Shreesurya Investments (PAN ABSPJ5397C and Mr.
Sameer S. Joshi (HUF): AAPHS5352A) are directed not to, directly or indirectly, access
the securities market, and are further restrained and prohibited from buying, selling or
otherwise dealing in the securities market, directly or indirectly in whatsoever manner, from
the date of this Order, till the expiry of five (5) years from the date of completion of
refunds to investors as directed above.
c) Mr. Sameer S. Joshi, Prop. Shreesurya Investments (PAN: ABSPJ5397C) shall refund
the monies so collected from his clients and other investors in the various schemes along with
income, profits or returns promised to them under such schemes or interest at the rate of
10% per annum, whichever is higher, from the date of investment till the date of refund,
within a period of ninety (90) days from the date of this order and submit a repayment
report to SEBI in the following format as certified by two independent peer reviewed
Chartered Accountants who are in the panel of any public authority or public institution:
S. No.

Name of
Client /
Investor

PAN of
Client /
Investor

Address of
Client/
Investor

Refund Details
From
Cheque No./
Demand Draft/
NEFT details

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To
Name of the
Bank

Cheque No./
Demand Draft/
NEFT details

Amount

d) Mr. Sameer S. Joshi, (PAN ABSPJ5397C) is permitted to sell the assets and the
proceeds shall be kept in an interest bearing escrow account to be opened in a scheduled
bank and the said proceeds shall be used for the sole purpose of making the repayments
including interest, as directed above.
e) Mr. Sameer S. Joshi, (PAN ABSPJ5397C) shall provide a full inventory of all his assets
and properties and details of all his bank accounts, de-mat accounts and holdings of
shares/securities, if additionally held in physical form.

19. This order shall come into force with immediate effect. The stock exchanges and the
depositories are directed to ensure that the above directions are strictly enforced.

January 08, 2016

Mumbai

S. RAMAN
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA

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