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SEBI cracks down on Islamic broking firm for fraud

The Securities and Exchange Board of India has cracked down on an Islamic stockbroking firm in the city,Parsoli Corporation,for alleged fraud.

Written by Syed Khalique Ahmed | Ahmedabad |
February 26, 2009 1:43:47 am

Bans Ahmedabad-based Parsoli Corporation from engaging in direct and indirect buying and selling of securities

The Securities and Exchange Board of India (SEBI) has cracked down on an Islamic stockbroking firm in the city,Parsoli Corporation,for alleged fraud.

Parsoli has been banned from engaging in direct and indirect buying and selling of securities and registering clients.

With the SEBI ban coming into effect from February 20,action has been taken against the company for issuing fraudulent shares in 2005 on the pretext of providing portfolio advisory services to its clients.

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The company has on its client list of 8,000 some 20 franchisee units,including some from Kashmir.

The corporation also claims to have some Islamic clerics on its board who ‘help’ them to enter into transaction with only those companies that conform to Islamic laws (Shariah).

Parsoli has also been asked to remove its registrar and transfer agent,Pinnacle Shares Registry Private Limited,and appoint another registrar and transfer agent within a period of six months from the date of order.

A senior company executive said that SEBI had inspected Parsoli’s offices six months ago and vouched that the company had nothing to do with fraudulent transfer and dematerialisation of shares.

He also said that the company had appealed to the SEBI to settle the issue by levying some penalty,which was rejected. The company has approached the Sebi Administrative Tribunal (SAT) where the matter is now pending.

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