SEBI finds insufficient evidence to support financial claims in refund dispute

SEBI examined the Noticee's bank statements and submissions to determine the exact quantum of fees collected from clients that must be refunded.

Who it concerns: Shri. Siddhant Suresh Chandan (Noticee); SEBI (Regulator); Hon’ble Securities Appellate Tribunal (SAT); Mr. Jitendra Verma (Accountant); M/s Bhagyabhumi Impex; M/s Capital Steel; M/s Orbit Impex; Angel One Ltd. (Angel Broking).

What SEBI found or ordered

• SEBI found that the Noticee collected monies from clients for unregistered investment advisory services.
• SEBI identified total credits of Rs. 4,17,25,034 in two specific bank accounts (SBI and ICICI) during the period 14/02/2017 to 10/08/2021.
• The Noticee claimed a net refund liability of Rs. 29,72,711 after deducting refunds, loans, and brokerage, but failed to provide sufficient documentary evidence to support these deductions.
• SEBI noted that the Noticee repeatedly failed to submit supporting documents (such as Form 26AS, contract notes, and identity proofs) despite multiple extensions and opportunities.
• The order is based on the SAT's direction to re-compute the refund quantum and provide a hearing, which SEBI conducted after the Noticee's non-compliance with document submission deadlines.

Also in the document

• The Noticee claimed to be in Indonesia due to earthquake disruptions and requested virtual hearings, but SEBI noted he failed to provide the required evidentiary documents to support his financial classifications.
• SEBI specifically noted that the Noticee submitted documents (like bank books and ID cards) without explaining how they supported his claims, which SEBI deemed insufficient.
• The case involves a dispute over the classification of bank credits, with the Noticee arguing that a significant portion of funds were loans or business income rather than client fees.