Sebi Cracks Down on Maheshwari Datamatics for Regulatory Lapses

In a significant move to uphold regulatory compliance in the capital markets, the Securities and Exchange Board of India (Sebi) has imposed penalties on two entities for flouting market rules. Maheshwari Datamatics Pvt Ltd (MDPL) and Capital Grow Financial Services Proprietor Prashant Gole have been fined for various violations.

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Maheshwari Datamatics Fined for Certification Lapse

Sebi has levied a fine of Rs 6 lakh on Maheshwari Datamatics, a Sebi-registered Registrar to an issue and Share Transfer Agent (RTA), for failing to ensure that its associated person, Radhey Shyam Jhanwar, possessed the mandatory National Institute of Securities Markets (NISM) certification during the inspection period from April 2021 to November 2022.

According to Sebi rules, associate persons must adhere to specific procedural requirements regarding certification. MDPL's failure to comply with these requirements constituted a violation of the RTA rules.

Sebi Adjudicating Officer N Hariharan noted that the noticee had been previously penalized for similar violations, indicating a lack of attention to deficiencies pointed out in earlier inspections.

Capital Grow Financial Services Fined for Delay in Processing Requests

In a separate order, Sebi imposed a penalty of Rs 6 lakh on Capital Grow Financial Services Proprietor Prashant Gole for violating market rules. This action follows the Securities Appellate Tribunal's (SAT) ruling in January 2023, which set aside Sebi's earlier order and directed the regulator to pass a fresh order.

Capital Grow Financial Services is a Sebi-registered investment adviser. Sebi found that the firm had delayed processing requests from investors beyond the prescribed timelines, affecting the genuine rights of investors.

Sebi's actions underscore the importance of regulatory compliance in the capital markets. By imposing penalties on Maheshwari Datamatics and Capital Grow Financial Services, Sebi aims to ensure that market participants adhere to the prescribed rules and regulations, thereby protecting the interests of investors and maintaining the integrity of the securities market.