SEBI orders Avadhut Sathe's trading academy to refund Rs 546.17 crore to investors

The capital market regulator SEBI has taken major action against Avadhut Sathe Trading Academy Private Limited (ASTPL) and its founder Avadhut Sathe. It is alleged that thousands of newcomers were defrauded in the name of trading and that classes were being run without registration. SEBI has ordered the return of Rs 546.17 crore collected from investors and people who joined the classes.

SEBI's investigation found that the company and its founder were working as investment advisers and research analysts without the required registration. According to the investigation, ASTPL and its founder were not limited to teaching about the stock market. They were also advising investors to buy and sell particular shares. Despite lacking the required regulatory registration, the company allegedly also gave advice on entry and exit levels, stop loss and the direction in which a share price would move.

In its final order, SEBI has completely barred Avadhut Sathe and his company from the market. The ban is for two years, or until the refund directions are complied with, whichever is longer. Avadhut Sathe, who runs the company, has separately been told to stay away from the market for six months.

A time limit has also been set for depositing the money. Within five months of the date of the order, the company and Avadhut Sathe must deposit the entire amount, Rs 546.17 crore, in a designated bank account. They must also, within 30 days, publish advertisements in an English newspaper, a Hindi newspaper and a widely read local-language newspaper, so that investors get information about the refund process.

SEBI has clarified that, to keep a full record of payments and to ensure that the recipients are properly identified, refunds to investors will be made only through electronic fund transfer or other banking channels. If any amount remains after all claimants have been paid, it will be handed over to SEBI. This amount will be kept in an escrow account for one year so that eligible investors and complainants who were left out can be paid. If any money still remains after this period, it will be transferred to the Investor Protection and Education Fund (IPEF).

Along with the refund, SEBI has also imposed penalties. The company, Avadhut Sathe and Gauri Sathe have been fined a total of Rs 11.5 crore. This includes Rs 6 crore on the company, Rs 4 crore on Avadhut Sathe and Rs 1.5 crore on Gauri Sathe. According to SEBI, this amount must be paid within 45 days of receipt of the order.

SEBI has also said in the order that debit transactions in the bank accounts of the parties concerned will remain frozen until the entire amount is deposited.