Order in the matter of GoCapital

UnderSections11(1),11(4)and11BoftheSecuritiesandExchangeBoardofIndiaAct,1992, read with the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013in respectof

Serial Name PAN no.

1. GoCapital and the proprietor, Mr. Ankitkumar CTKPS0145K Shashikant Singhania

CASE FACTS 1. Securities and Exchange Board of India ("SEBI") received a complaint on January 22, 2015 allegingthatthecomplainantincurredlossesonthetradesexecutedonthebasisoftipsreceived from GoCapital. GoCapital is a proprietorship business of Mr. Ankitkumar Shashikant Singhania (PAN: CTKPS0145K). The office address of the entity (as provided by the complainant) is GoCapital Division, Tulsi Chambers, Office No. A/203, Nariman Point, Mumbai- 400021. The address of the entity mentioned in their letterhead is Office No. 10, GroundFloor,Hari Om, Puja Apts, M.P. road,Wada,Dombivali (W)-421202. 2. OnperusalofthewebsiteofGoCapital(www.gocapital.co.in)itwasnotedthatGoCapitalwas offeringinvestmentadvisoryservicessuchastipsforStocks-CashandF&OtradedinNSE & BSE, commodities including bullions, metals commodities traded in MCX, etc. It was also OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania observed that the entity was providing subscription services under various heads such as Equity, Derivative, Futures and Options and Nifty. It was further observed that in order to receive such subscription amounts, GoCapital has mentioned details of their bank account (Axis Bank,LBSMarg Branch,Mulund, Mumbai) in theirwebsite.

3. Pursuanttothesame,SEBIconductedapreliminaryexaminationoftheactivitiesofGoCapital, withaviewtoascertainpossibleviolationsoftheSecuritiesandExchangeBoardofIndiaAct, 1992 (“SEBI Act”) and the Securities and Exchange Board of India (Investment Advisers) Regulations,2013(“IA Regulations”). 4. BasedonthedetailsofGoCapital’sbankaccountwithAxisBank,LBSMargMulundBranch, Mumbai (Account No. 913020010971317) available on its website, SEBI vide letters dated March9,2015,April1,2015andJuly8,2015soughtcertaininformationfromAxisBankwith regardtoGoCapital.VidelettersdatedMarch17,2015,April13,2015andJuly11,2015,Axis Bankprovided, inter alia, the details of bankaccount maintained byGoCapital, bank account statements for the period December 1, 2012 to February 22, 2013 of the proprietor, Mr. AnkitkumarShashikantSinghaniaandBankaccountstatementsfortheperiodJanuary1,2015 to July10,2015ofGoCapital. 5. After several attempts to contact GoCapital seeking information, the entity vide letter dated July14,2015andviaemaildatedJuly15,2015,repliedstatingthattheiraddresshadchanged and therefore it did not get any of the physical letters sent by SEBI.

GoCapital further sought extensionoftimeforsubmissionofreplyfor15days.SEBI,accordinglyadvisedGoCapitalto submit their reply latest before July31, 2015. Subsequently, GoCapital vide email dated July 31, 2015 sought for further extension of time. GoCapital was then advised to provide their reply latest by August 14, 2015 and was also informed that no further request for extension shallbeentertained.GoCapital,videtheiremaildatedAugust20,2015requestedSEBItogrant an opportunity for personal hearing to put across their stand on the issue and provide the requisite information to SEBI. In response, SEBI vide email dated August 25, 2015 clarified that personal hearing was not possible at this stage and that the requisite information needs to beprovidedwithoutany furtherdelay.GoCapitalwasfurtheradvisedtoprovidetheirreplyto OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania theissues raisedin theletters sentbySEBI latest byAugust31,2015.However,no replywas received from GoCapital within the prescribed time in spite of being afforded several opportunities forsubmission ofinformation.

6. Primafaciefindings/allegationsinbrief:Pursuanttotheexamination,SEBIpassedaninterim order dated December 30, 2015, against GoCapital and its proprietor, Mr. Ankitkumar Shashikant Singhania (hereinafter referred to as Noticees), wherein the following prima facie findings/allegations wererecorded. a) Thewebsiteofthe Noticeestatesasbelow:

“GoCapital Services is an Investment Advisory Company which provides safe recommendationsforyourvaluedInvestmentsintheStockMarket.WeprovidetheBest Share Tips. We recommend for Stocks- Cash and F&O traded in NSE & BSE, commoditiesincluding bullions, metalscommoditiestradedin MCX. Our Mission: ..to provide practical and educational resources which will encourage everyonetobeproactiveregardingtheirfinancialneedsandsituations...weassureour customermorethan 85% accuracyin ourrecommendations onstockmarket. Our Motto: to provide people with opportunities to make fast money with minimum riskin ashort periodof time. Our services: i. Intradayequity ii. Futures &Options iii.BTST-STBT iv.NIFTY” b) Thefeesfor the aforesaid servicesranging fromRs.20,000/- to Rs. 35,000/-arelevied onmonthlybasis. Onesuch package,as givenin the websiteis reproduced asunder: “Intraday Equity 1. Get1–2ideasdaily. OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

2. Minimum1,000to 3,000Quantity. 3. Get6,000to 10,000profits in eachcall. 4. Cost of PackageRs20,000for 1month.Salestaxof 12.36%extra.” c) Noticeehas giventhe details ofits bankaccountin its websitewhichareas follows: “Payment: Makepayment directlyto ourbankAccountName: GoCapital Bank:Axisbank, BranchAddress:LBS Marg Branch,Mulund,Mumbai-400080” d) The Noticee had opened the Bank Account on February 26, 2013 with Axis Bank bearingno.913020010971317.Severalcreditentriesasmentionedinthebankaccount statement for the period of January1, 2015 to July 10, 2015, are stated as “investment tips”,“investmentadvice”,“profitsharing”, etc. e) The Noticee is providing investment advisory services to its clients for consideration. Tips are being provided to the investors through calls. The clients could register for free trials with the option of registering with the Noticee as a regular client, choosing anyof theservicesasmentioned onits website. f) The activities of the Noticee fall within the definition of activities of “investment adviser” as defined under Regulation 2(m) of the IA Regulations. The Noticee is not registered with SEBI in any capacity, neither as an investment advisor or research analyst or portfolio manager nor as a broker or a sub-broker affiliated to any brokers. TheNoticeehasviolatedSection12(1)oftheSEBIActandRegulation3(1)oftheIA Regulations. 7. In view of the prima facie findings on the violations, the following directions were issued in thesaidinterimorderdated October6, 2016with immediateeffect: i. “ceaseanddesistfromactingasaninvestmentadvisorandceasetosolicitorundertake such activity or any other activities in the securities market, directly or indirectly, in anymatter whatsoever;

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania ii. to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to their investmentadvisoryor anyunregistered activityin thesecuritiesmarket; iii.tofurnishalltheinformationsoughtbySEBI,videlettersdatedFebruary6,2015,April 28,2015,June 24,2015andJune 25,2015.” 8. IntheinterimorderitwasstatedthattheNoticeeanditsproprietor,Mr.AnkitkumarShashikant Singhania, would be afforded 21 days, from the date of receipt of the interim order, to show cause as to why appropriate directions, under the SEBI Act, 1992 and relevant SEBI Rules/Regulations including directions prohibiting them from buying, selling or otherwise dealing in securities market, and requiring the investment adviser to refund any money collectedasfees,chargesorcommissionsorotherwisetotheconcerned clientsalongwith the requisiteinterest,shouldnotbetakenagainstthem,andtofileitsreplies,ifanyandtoseekan opportunityofpersonal hearing,iftheyso desired. 9. Serviceof interim order and hearing notice: The interim orderdated December 30, 2015 was servedontheNoticees,videletterdatedDecember30,2015.VideemaildatedJanuary7,2016, theNoticeessoughtforopportunityof personalhearingin thematter.Vide public notification dated October 15, 2017 and vide email dated October 23, 2017, the Noticees were granted an opportunity of personal hearing in the matter on December 5, 2017 at the venue and time mentionedtherein. 10.Hearing and submissions: Mr. Ankitkumar Shashikant Singhania, proprietor of GoCapital, alongwithMr.VikasKumar,CharteredAccountant,appearedforthepersonalhearinggranted onDecember5,2017and madethefollowingoral submissions, statinginteralia, that: a. GoCapitalwasstartedinNovember2013withawebsitefromaroundMarch2014,andthe business was stopped in December 2014. Customers would be paying the fees out of the profitsmade.

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania b. GoCapitalfulfilledallservicestoclientsanddidnotgetnewcustomersafterreceivingthe SEBIletter. The Noticee had also tried takingsteps to resolve the existing complaints and wasreadyto returntheloss. However,the complainant askedfor morethan theloss. c. There were about 85 to 90 customers of the Noticee and fees of around Rs. 16 lakh was collected.However,he does not havethedetails ofcustomers. d. The Noticee attempted to obtain registration of SEBI, but was unable to due to lack of format of application. The Noticee has also submitted that he was not aware that registrationwasmandatoryin 2013. 11.The Noticee also submitted bank statements of the account of GoCapital with Axis Bank, bearingno.913020010971317 fortheperiod of April1,2013andMarch 31,2015. 12.I have considered the allegations, and materials on record. On perusal of the materials on record, the following issues arise for consideration. Each question is dealt with separately underdifferentheadings:

i. Whether GoCapital, under its proprietor, Mr. Ankitkumar Shashikant Singhania, was involvedin unregisteredinvestment advisoryactivities. ii. Ifso,whetherGoCapital, alongwith its proprietor, Mr.AnkitkumarShashikantSinghania hasviolatedsection12(1) oftheSEBI Actand regulation 3(1)ofthe IARegulations. iii. If the findings on Issue No. 2 are found in the affirmative, who are liable for the violation committed?

Issue no. 1: Whether GoCapital, under its proprietor, Mr. Ankitkumar Shashikant Singhania, was involvedin investmentadvisoryactivities. 13.I have perused the interim order dated December 30, 2015 for the allegation of unregistered investmentadvisoryactivities.Inotethatneitherthecompanynorthedirectorsfiledanyreply denyingthesame. 14.Onperusalofthe records ofthewebsite, Inotethe following: “GoCapital Services is an Investment Advisory Company which provides safe recommendationsforyourvaluedInvestmentsintheStockMarket. WeprovidetheBestShare OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

Tips.WerecommendforStocks-CashandF&OtradedinNSE&BSE,commoditiesincluding bullions, metalscommoditiestradedin MCX.” In view of the above, I find that GoCapital has on its website declared itself as an investment adviser, with advisory services being offered in, inter alia, Intra-day equity and Futures and Options. 15.The website also states the pricing details for the services provided in various packages, with feesrangingfromRs.20,000/-toRs.35,000/-,asallegedintheparagraph4.1.iiioftheinterim order.Noticeehas alsoprovidedthebankdetails whereinfeeswereto be paid. 16.On perusal of the bank statements obtained from Axis Bank, during the period of January 1, 2015toJuly10,2015,itisalsonotedthattherewerefewcreditentriesmentioningtermssuch as‘investmenttips, ‘investmentadvice’,‘services charges’,‘for trading’, etc. 17.Further, during the personal hearing in the matter, Mr. Ankitkumar Shashikant Singhania admitted that GoCapital was providing investment adviser services to customers in exchange offees,andthebusinesswasstoppedaroundDecember2014.Itwasfurthersubmittedthatthe Noticee had about 85 to 90 customers from whom, about Rs. 16 lakh was collected as fees.

However, there is no supporting documentary evidence to show that the Noticee had in fact collected only Rs. 16 lakh as fees from his clients. On perusal of the bank account statement of GoCapital for the period of February 26, 2013 to March 19, 2016, I note that a total credit of Rs. 37,89,795/-. Therefore, I find that the Noticee was providing investment advisory services in exchange of consideration from February 26, 2013 till March 19, 2016. Separate directionshavebeenmadeinthisOrderwhiledealingwithIssueno.3,forrefundofmoneyto theNoticee’sclients,from thesaidtotal creditamount. 18.I have perused the definition of investment adviser as given in regulation 2(m) of the IA Regulations, which states that investment adviser means “means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called”. Further, I have perused regulation 2(l) of OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania the IA Regulations which defines investment advice as “advice relating to investing in, purchasing,sellingor otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether written, oralorthroughanyothermeansofcommunicationforthebenefitoftheclientandshallinclude financial planning.” 19.The activities of the Noticees as brought out from the bank accounts statements, declaration on its website, as well as admission during the personal hearing, seen in the backdrop of the aforesaidprovisions clearlyshowthatthe Noticees haveactedasinvestment advisers.

Issue no. 2: If so, whether GoCapital, along with its proprietor, Mr. Ankitkumar Shashikant Singhaniahasviolatedsection12(1)oftheSEBIActandregulation3(1)oftheIA Regulations. 20.I note that as a measure of investor protection, it is imperative on any person carrying out investment advisory activities, to obtain registration and conduct its activities in accordance with the provisions of the SEBI Act and the IA Regulations. I have perused of Section 12(1) oftheSEBIAct whichstates that “No stock broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act.” Further, I note that as per regulation 3(1) of the IA Regulations, 2013, “on and from the commencementoftheseregulations,nopersonshallactasaninvestmentadviserorholditself outasaninvestmentadviserunlesshehasobtainedacertificateofregistrationfromtheBoard undertheseregulations.”

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

21.GoCapitalanditsproprietor,Mr.AnkitkumarShashikantSinghania,admittedlydonotpossess a certificate of registration to carry on the activities as an investment adviser. The proviso to regulation 3 of the IA Regulations states that “a person acting as an investment adviser immediatelybeforethecommencementoftheseregulationsmaycontinuetodosoforaperiod of six months from such commencement or, if it has made an application for a certificate … withinthesaidperiodofsixmonths,tillthedisposalofsuchapplication.”TheIARegulations were notified on January 21, 2013. The IA Regulations came into effect on April 21, 2013. Therefore, any person who had been providing investment advisory service before the IA Regulations came into effect can, by virtue of the proviso under regulation 3, continue to do so without a certificate of registration till October 20, 2013, beyond which the said person would have to obtain a certificate of registration or may continue to do so till the time his applicationforregistration is disposedof. 22.GoCapital during the personal hearing, has submitted that the website was started in March, 2014,andthattheentitycameintoexistenceinNovember2013.HowevertheNoticeehasnot submittedanydocumentaryevidenceinsupportofitsclaimandthereforedonotfindanymerit in the said submissions.

I further find that as per the account opening documents received by SEBIvide letter dated April 13,2015,from Axis Bank,the accountofGoCapital, bearing no. 913020010971317, was opened on February 26, 2013. As per the Certificate of Registration under the Bombay Shops and Establishment Act, 1948, GoCapital was formed on November 10, 2012. Therefore, it appears that the Noticees have made inconsistent submissions during thepersonalhearing.Inview oftheabove, Inotethat theNoticeefallswithin thescopeofthe proviso to regulation 3 of the IA Regulations, as discussed above. Thereby, the Noticees had time till October 21, 2013 to file its application for registration. Even assuming that the submissionsoftheNoticeesduringthepersonalhearing,thatthewebsitewasstartedinMarch 2014,weretrue,theNoticeecouldnothaveengagedinprovidinginvestmentadvisoryservices withoutobtainingcertificateofregistrationfromSEBIastheIARegulationshadalreadycome intoeffectonApril21,2013.Therefore,admittedly,theNoticeeswereprovidingunregistered investment advisory services, which is in violation of regulation 3(1) read with its proviso of the IARegulations.

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

23.I also find that there is nothing on record, to show that GoCapital and its proprietor Mr. AnkitkumarShashikantSinghaniafallinanyofthecategoriesofexemptionasprovidedunder regulation 4 of the IA Regulations. The Noticees have not submitted any representation contendingthe same,as well. 24.InotethatGoCapitalhassubmittedthatithadfulfilledallservicestoitsclientsanddidnotget new customers after receiving the first letter from SEBI seeking information. I find no merit in this submission as it is already established that the Noticee was providing unregistered investment advisory services. Ceasing to provide services to new clients does not in any mannermitigate theviolation ofthesecuritieslaws. 25.IalsonotethattheNoticeeshaveclaimedthatit triedto fileanapplicationforregistrationbut could not, on account of not findingthe requisite form of application. The Noticees have also contended that it was not aware that the requirement of registration was mandatory as per the relevant provisions of law. I find no merit in such submissions, as ignoranceof the law is not avaliddefence againsttheallegationofaviolation. 26.In view of the above, I find that GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania has violated section 12(1) of the SEBI Act along with regulation 3(1) of the IA Regulations.

IssueNo.3:IfthefindingsonquestionNo.2arefoundintheaffirmative,whoareliableforthe violation committed? 27.In view of the foregoing, GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania are liable for the aforesaid violations of section 12(1) of the SEBI Act along with regulation 3(1) of the IA Regulations. In order to safeguard the interest of the investors and their investments, and to further ensure orderly development of securities market it becomes necessary for SEBI to issue appropriate directions against GoCapital and its proprietor, Mr. AnkitkumarShashikantSinghania.

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

28.Since the Noticee has admittedly collected funds as fees from about 85 to 90 investors under different categories of schemes, acting as unregistered investment adviser, it would be reasonablethatsuchfundscollectedinanynameareliabletobereturnedtotheinvestors.The Noticeehasstatedthatthecustomerswouldpayfeesto theNoticeeout oftheprofitsmadeby them. Regulation 2(g) of the IA Regulations defines “consideration” to mean “any form of economic benefit … received or receivable for providing investment advice.” Therefore, any profit sharing arrangement as claimed by the Noticee during the personal hearing, would also be within the ambit of the IARegulations. The Noticeehas admitted to collectingRs. 16 lakh as fees. However, the said amount is not supported by documentary evidence. On perusal of the details of the Bank account of GoCapital, bearing no. 913020010971317 for the period of February26,2013toMarch19,2016,IfindthatafterOctober21,2013,therewasatotalcredit of Rs. 27,65,339/-. Since the Noticee has failed to provide any evidence to show that the fees collectedwasinfactlimitedtoonlyRs.16lakh,Iamoftheviewthattheentirecreditamount from October 22, 2013 till March 19, 2016, i.e. Rs. 27,65,339/- should be directed to be refunded.Therefore,IfindthattheNoticeehascollectedatleastanamountofRs.27,65,339/-which has to be refunded to investors. The said amount of refund can be more subject to the availabilityofmaterial on thefeescollectedbythe Noticee. 29.Inviewofthediscussionabove,appropriateactioninaccordancewithlawneedstobeinitiated againstGoCapitalanditsproprietor,Mr.AnkitkumarShashikantSinghania.Theinterimorder has contemplated issuance of directions against the Noticees including prohibiting them from buying,sellingorotherwise dealingin securitiesmarket,andrequiringthe investmentadviser to refund any moneycollected as fees, charges or commissions or otherwise to the concerned clients. 30.Section 11 of SEBI Act casts a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. For achievingsuchobject,ithasbeenauthorisedtotakesuchmeasuresasitthinksfit.Thus,power to take all measures necessary to discharge its duty under the statute which is a reflection of theobjectivedisclosedin thepreamblehas been conferredin widestamplitude.

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania

31.Section 11B and Section 11(4) of SEBI Act are functional tools in the hands of the Board. In effect,Section11B andSection11(4) SEBI Act aresomeof the executive measuresavailable toSEBItoenforceitsprimedutyofinvestorprotection.SEBIisempoweredtoissuedirections in the interests of investors of any person or class of persons referred to in Section 12 of the SEBIActor associatedwith thesecuritiesmarket. ORDER 32.Therefore, I, in exercise of the powers conferred under section 19 of the SEBI Act read with sections11(1),11(4),and 11BoftheSEBI Act, herebyissuethe followingdirections: a. GoCapitalanditsproprietorMr.AnkitkumarShashikantSinghania,shallforthwithrefund the money received from its clientsas fees/profit sharing/compensation in any other form, in respectofits unregistered investmentadvisoryactivities. b. GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania shall issue public noticeinalleditionsoftwoNationalDailies(oneEnglishandoneHindi)andinonelocaldaily with wide circulation, detailing the modalities for refund, including the details of contact personssuchasnames,addressesandcontactdetails,within15daysofthisOrdercominginto effect. c. The repayments to the clients shall be effected only through Bank Demand Draft or Pay Orderbothofwhichshouldbecrossedas“Non-Transferable”orthroughanyotherappropriate bankingchannelswith clearlyidentifiedbeneficiaries. d. After completing the aforesaid repayments, GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania shall submit a certificate from a peer reviewed Chartered Accountant who is in the panel of any public authority or public institution, within a period of 3 months.

For the purpose of this Order, a peer reviewed Chartered Accountant shall mean a Chartered Accountant, who has been categorized so by the Institute of Chartered Accountants of India ("ICAI")holdingsuch certificate. e. IncaseoffailureofGoCapitalandits proprietorMr.AnkitkumarShashikant Singhaniato complywiththeaforesaiddirections,SEBI,ontheexpiryofthreemonthsperiodfromthedate OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania of this Order may recover such amounts, from GoCapital and its proprietor Mr. Ankitkumar ShashikantSinghaniaasspecifiedinparagraph32(a)ofthisOrder,inaccordancewithsection 28AoftheSEBI Actincluding suchother provisions containedin securities laws. f. GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania are directed not to, directly or indirectly, access the securities market, and are prohibited from buying, selling or otherwisedealingin thesecurities market, directlyorindirectlyin whatsoever manner,till the expiry of 4 years from the date of refund. The above said proprietor is also restrained from associating with any listed public company and any public company which intends to raise moneyfromthepublic,oranyintermediaryregisteredwithSEBItilltheexpiryof4yearsfrom thedateofrefund. g. GoCapital and its proprietor Mr. Ankitkumar Shashikant Singhania shall not undertake, either directly or indirectly, investment advisory services or any activity in the securities marketwithoutobtainingacertificateofregistrationfromSEBIasrequiredunderthesecurities lawsafterthe expiryofperiod ofdebarmentasmentioned in paragraph32(f). h. Theabovedirections shall comeinto forcewith immediateeffect.

33.Copy of this Order shall be forwarded to the recognised stock exchanges, depositories, and registrarandtransferagents, forinformationand necessaryaction.

DATE:April 18, 2018 PLACE:Mumbai MADHABI PURIBUCH WHOLE TIME MEMBER SECURITIES ANDEXCHANGEBOARDOF INDIA

OrderinthematterofGoCapitalanditsprop.Mr.AnkitkumarShashikantSinghania