SEBI inspection finds ₹4.72 lakh maximum fee charged by Capital Vraddhi

This order addresses a comprehensive inspection of Capital Vraddhi Financial Services, an Investment Adviser, for alleged violations of SEBI regulations regarding fee structures, client agreements, and fair trade practices between April 2020 and March 2022.

Who it concerns: Capital Vraddhi Financial Services, Proprietor- Mr. Raju Jhariya (SEBI Registration No. INA000005291)

What SEBI found or ordered

• SEBI conducted an inspection for the period April 01, 2020 to March 31, 2022.
• The Designated Authority (DA) recommended that the Noticee be prohibited from onboarding new clients for a period of 12 months.
• Alleged violations include lack of requisite qualification, non-compliance with fee structure caps, failure to maintain records, and providing profit guarantees.
• The Noticee claimed that extra-judicial confessions were extracted under coercion and that fees exceeding the cap were due to GST.
• The Noticee argued that 'free trials' were actually sample calls and that employees did not use personal phones for advisory services.

Also in the document

• The order text provided is truncated and does not contain SEBI's final decision or the specific penalty imposed, only the DA's recommendation and the Noticee's defense.
• The Noticee alleged that SEBI officers threatened to file false police complaints if he refused to sign documents during the inspection.
• The maximum fee charged by the Noticee was stated to be ₹4,72,000, which the Noticee argued was reasonable given the client's income.