Regulator Bars Avadhoot Sathe, Imposes Rs 11.5 Crore Penalty
The Securities and Exchange Board of India has issued a final order against Avadhoot Sathe Trading Academy Private Limited (ASTPL) and its founder, Avadhoot Sathe, directing them to refund Rs 546.17 crore to investors and participants. The regulator has also imposed a combined penalty of Rs 11.5 crore.
The order follows findings that the company and its founder were conducting investment advisory and research analyst activities without obtaining the required registration with the regulator.
Under the order, Avadhoot Sathe and the company are barred from the securities market for two years or until they comply with the refund instructions, whichever is longer. Avadhoot Sathe, who is a director of the company, has been barred from the market for six months.
The company and Avadhoot Sathe have been asked to place the full Rs 546.17 crore in a special bank account within five months of receiving the order. They are also required to publish advertisements within 30 days in English, Hindi and a widely circulated local language newspaper to inform investors about the refund process.
SEBI has made it clear that refunds must be made only through electronic fund transfers or other banking routes. This is intended to create a full payment record and ensure that beneficiaries are properly identified.
If any money remains after all eligible claimants have been paid, it must be surrendered to SEBI. The leftover amount will be held in an escrow account for one year to meet payments to eligible investors and complainants. Any balance remaining after this period will be transferred to the Investor Protection and Education Fund (IPEF).
The penalties include Rs 6 crore on the company, Rs 4 crore on Avadhoot Sathe and Rs 1.5 crore on Gauri Sathe. These amounts must be deposited within 45 days of receiving the order.
Until the full penalty is paid, debit transactions from the bank accounts of the parties concerned will remain restricted, the regulator said.
SEBI's investigation found that ASTPL and its founder went beyond market education. They allegedly advised investors to buy and sell particular shares, offering suggestions on entry and exit points, stop-loss levels and expected share price movements, without holding the necessary regulatory registration.
The probe further noted that the company's promotional material emphasised selected profitable trades and drew participants by promising high returns. Despite receiving an administrative warning in March 2024, the company did not alter these practices, leading SEBI to take firm action.