SEBI, the market regulator, cancelled Sahara India Financial Corporation Ltd's certificate of registration as a sub-broker on Wednesday, citing the company's failure to meet the "fit and proper" requirements.
The DA stated in the Enquiry Report that "considering Subrata Roy Sahara's antecedents and the numerous judicial pronouncements against him and other Sahara Group Companies, it is decided that the Noticee is not a 'fit and proper person to continue as a sub-broker in the securities market."
In 2018, the regulator named a specified authority to investigate whether Sahara India Financial broke the Intermediaries Regulations. Actions were taken against certain Sahara individuals, as well as the Sebi event, were also listed in the order.
In light of the actions/ prosecutions carried out against a substantial shareholder/ promoter Subrata Roy Sahara and the companies with which he is affiliated, the order said, Sebi cannot take it lightly as a watchdog of the stock market and protector of investor's interests.
The Sponsor Company, as well as its Key Managerial Persons or Key Persons who regulate the Company, must be fit and proper, according to the Mutual Fund Regulations. There are no cited judgments in the sense of the stock market, where the SEBI Act, 1992, and its Regulations were examined.
Sebi Whole Time Member G Mahalingam said in a 12-page order issued on Wednesday that he agreed with the designated authority's findings that the noticee is not a "fit and proper individual" under the Intermediaries Regulations.
"I hereby cancel the Certificate of registration of the Noticee, i.e. Sahara India Financial Corporation Limited, (sub-broker), in the exercise of the powers conferred upon," the market regulator said.
On the expiration of twenty-one (21) days from the date of this order, it will become effective.