The amount was transferred to his company Mansun’s bank account as fee for advisory services
Finfluencer PR Sundar, his company Mansun Consulting and co-promoter of the company Mangayarkarasi Sundar have settled with the market regulator, following complaints that they were providing investment advisory services without the requisite registration from the Securities and Exchange Board of India (Sebi).
The three have agreed to refrain from buying, selling or otherwise dealing in securities for one year from the passing of the Settlement Order; to pay a settlement amount; and to disgorge more than Rs 6 crore, which includes profit earned from advisory services and interest on the profit.
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The Settlement Order, which was passed on May 25, recorded the settlement amount as Rs 15,60,000 had to be paid by each, totalling to Rs. 46,80,000; and disgorgement amount as Rs 6,07,69,863, including interest of 12 percent per annum from June 01, 2020 till the date of submission of the revised settlement terms (RST), which was reached in February 2023.
According to Sebi’s order, the market regulator had received two references inter alia alleging that P R Sundar was providing advisory services without obtaining the requisite registration from SEBI.
“Upon examination, it was observed that Applicant no. 2 (PR Sundar) was running the website www.prsundar.blogspot.com through which he was offering various packages for providing advisory services. The fees collected in lieu of the services were received via a payment gateway linked to the bank account of Applicant no. 1, Mansun Consultancy Pvt. Ltd. (hereinafter referred to as ‘Mansun/ company’) held with ICICI Bank Ltd,” stated the order.
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PR Sundar and Mangayarkarasi Sundar are promoters of Mansun, incorporated on June 30, 2017, with 50 percent shareholding each.
After receiving the tip off, the market regulator sent a showcause notice to all three entities on May 17, 2022, and a supplementary showcase notice on November 8, 2022, with various observations.
These included that the blog had posts from 2013 onwards that advertised advisory services through Telegram channels and a payment channel for these services. The amount collected was being credited to a bank account of Mansun.
On enquiry, Mansun submitted a list of recommendations provided by its for January 2021. “Upon analysis of a sample of such recommendations it is observed that the aforesaid recommendations are related to purchasing / selling / dealing in securities which were communicated to the clients. Therefore, it was alleged that the recommendations provided by Mansun fall under the category of ‘investment advice’ as defined under Reg. 2 (1) (l) of SEBI (Investment Advisers) Regulations, 2013,” stated the Sebi order.
The advisory fees collected in Masun’s bank account through Razorpay and direct credit came to over Rs. 4.36 crorea and over Rs. 23.5 lakh, respectively.
The three were asked “to show cause as to why suitable directions including refund of fees collected, debarment, non-association with listed entities, intermediaries, imposition of monetary penalty etc. should not be issued” against them.
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The three filed a response in June, 2022; but while the proceedings were underway, they informed the investigating officers that they had filed three applications for settlement.
The settlement terms were deliberated first on January 18, 2023. Then the investigating committee allowed them to file revised settlement terms on February 2, 2023, which are the current settlement terms.