Order in the matter of MCX Biz Solutions

WTM/RKA/MIRSD/10/2015 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1), 11(4), 11B AND 11D OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992. In respect of MCX Biz Solutions and its proprietor Mr. Syed Sadaq (PAN: BACPS3885C)

1. SEBI vide an ad interim ex-parte order dated November 18, 2013 (hereinafter referred to as 'interim order') directed MCX Biz Solutions (hereinafter referred to as MBS) and its sole proprietor Mr. Syed Sadaq: (a) to restrain from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner till further directions; (b) to cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner whatsoever till further directions; (c) to immediately withdraw and remove all advertisements, representations, literatures, brochures, materials, publications, documents, websites, etc. in relation to any activity in the securities market; (d) prohibiting them from mobilizing funds from the public, in whatever form, till further directions; and (e) to keep entire money collected by them from the investors forthwith in an escrow account opened with any nationalized bank and file a report with SEBI in this regard within 7 days from the date of the order. 2. In the interim order, it was prima facie observed that MBS had displayed a fake and forged certificate of sub broker registration claiming itself to be registered with SEBI as a sub-broker and affiliated to an entity, namely, Bonanza Promotional Ltd., portraying it to be registered with SEBI as a stock broker with SEBI registration no. ‘INB632370386’ and a member of National Stock Exchange of India Limited. Neither MBS/Mr. Syed Sadaq nor Bonanza Promotional Ltd. are or were registered with SEBI as sub broker or stock broker, respectively. MBS/Mr. Syed Sadaq also floated false brochures and information on its website www.mcxbizsolutions.com (now inactive) soliciting and collecting money from public at large and promising high returns on their investments. They had also made representations and statements on their website about

Order in the matter of MCX Biz Solutions their activities in securities market which was in reckless and careless manner and had suggested facts which were false and untrue. By their acts they had fraudulently solicited, enticed and induced investors to deal in securities. The interim order was passed as MBS/Mr. Syed Sadaq were observed to have violated the prohibitions enshrined in section 11(1), 12(1), 12A (a) (b) and (c) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as "the Act") and regulation 2(1) (c), 3 (b), (c), (d), 4(1) and 4(2) (k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. The interim order also provided MBS/Mr. Syed Sadaq to file objections, if any, within 21 days from the date of the interim order and to avail opportunity of personal hearing before SEBI, if they so desire. 3. A public notice cautioning investors against dealing with MBS/Mr. Syed Sadaq was also published in “The Times of India” on November 23, 2013. I also note that Mr. Syed Sadaq does not hold any demat account. 4. The interim order sent to MBS and Mr. Syed Sadaq for service returned undelivered with remarks "No such person in the flat" and "Addressee left " respectively.

Enquiry with the other residents of the house at the address revealed that they had no knowledge of anyone by the name mentioned in the interim order. 5. Thereafter, the Chartered Accountant, who had certified that MBS/Mr. Syed Sadaq were engaged in the business of trading of home appliances and facilitated MBS/Mr. Syed Sadaq for opening a current account in State Bank of India and Axis Bank, was contacted and was advised to deliver the interim order to MBS/Mr. Syed Sadaq. However, the said Chartered Accountant informed that the interim order could not be served as no one was available at the addresses mentioned. 6. Alternative addresses of MBS/Mr. Syed Sadaq were sought from Axis Bank and State Bank of India. However, these banks furnished the same address at which the interim order could not be served earlier. As the interim order could not be served upon MBS/Mr. Syed Sadaq, advertisements were published in newspapers “The Hindu” and “Sakshi” (Andhra Pradesh edition) on January 13, 2014 wherein the entities were advised that the order has been made available on the SEBI website www.sebi.gov.in and they can also collect the order/notice from Deputy General Manager, MIRSD-5, SEBI, Mumbai, in person or through authorised representative on production of proper authorization letter.

The entities were also advised that reply, if any, should reach SEBI, Mumbai, within 14 days from the date of publication of this advertisement, failing which it shall be presumed that these entities have no reply to submit and the matter would be further proceeded ex-parte. However, no communication was received from MBS/Mr. Syed Sadaq. 7. I note that sufficient opportunities have been provided to MBS/Mr. Syed Sadaq to file reply to the interim order and charges/allegations made therein. I further note that MBS/Mr. Syed Sadaq have neither filed any written reply/submission to the interim order nor expressed any desire to avail personal hearing. They have not complied with SEBI direction to keep entire money collected by them from the investors in an escrow account opened with any nationalized bank as indicated in the interim order. Under these facts and circumstances, I deem it appropriate to decide the matter on the basis of material available on record. 8. From the material available on record I do not find any reason to draw any inference other than those drawn in the interim order.

However, a detailed investigation by SEBI may bring to light the depth of such activities that are carried out by MBS/Mr. Syed Sadaq and the extent of funds mobilized, in whatever form, from the investors. In the light of the facts and circumstances of the case, I am of the considered view that pending investigation in the matter no intervention is called for at this stage in either vacating the direction or modifying it. 9. I, therefore, in exercise of the powers conferred upon me under section 19 of the SEBI Act, read with sections 11 and 11B thereof, pending investigation in the matter, hereby confirm the directions issued in respect of MCX Biz Solutions and its proprietor Mr. Syed Sadaq (PAN: BACPS3885C) vide ad interim ex-parte order dated November 18, 2013. 10. This Order shall remain in force till further directions.

Sd/-

DATE: FEBRUARY 27TH, 2015 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA