Ponzi Scheme in Derivatives? Anugrah Stock & Broking and its Associates Teji Mandi Analytics and Om Shri Sai Investments might be involved in money laundering

In what appears to be a ponzi scheme in derivatives, three firms led by Anugrah Stock & Broking Ltd and its associates Teji Mandi Analytics Pvt Ltd and Om Shri Sai Investments may have been involved in money laundering, based on assuring steady monthly returns of anywhere between 1% and 1.3 % or over 19% annually.

They have amassed wealth well over Rs. 1,000 crore, but the number may be significantly higher and probably allowed them to hide mark-to-market losses for several months, since fresh investment and borrowings kept coming in even after the COVID-19 induced lock-down. 

Many investors have made investments of over Rs. 1 crore, while one south-Mumbai family alone has over Rs. 150 crore. The investors are trying to figure out what happened and ways and means to recover their money since they can no longer access their account and view holdings.

Teji Mandi Analytics, an associate, which was the main route to raising funds sent out an email pinning the blame on the clearing member, without naming it.

Modus Operandi

According to a chartered accountant (CA), activist and investment adviser, some of his clients had also invested with Teji Mandi Analytics (TMA), but on examining their books, he discovered that the firm fudged both higher returns as well as losses and made an average payment of 1.25% per month The firm never disclosed market-to-market (M2M) losses to investors. When it earned higher profits it could offset these losses. Since new investors kept coming in, there was never an issue about providing returns.

The firm has apparently been fudging M2M losses for several months, probably by using money invested by new clients. An inspection by the National Stock Exchange (NSE) discovered the unauthorised derivatives advisory scheme of Rs. 165 crore in an associate firm called Om Shri Siddhi Investments (OSSI) and shut off Anugrah’s derivatives business after which things unravelled rapidly. 

According to the Securities Appellate Tribunal (SAT) ruling on 17th August, the broker has to deposit Rs. 165 crore with NSE in two weeks, which will end shortly. According to an investor whose family had extended a ‘loan’ of over Rs. 1 crore to OSSI, OSSI has not been repaid and the firm has gone incommunicado since 27th August.

Investors of Anugrah and Teji Mandi Analytics have been told that wrongful selling by the clearing member is at the root of their problems. An email from Anil Gandhi, director of TMA, puts the entire blame on the Clearing member saying that “the Clearing Member made ‘unnecessary and wrongful deductions’ from some accounts by selling their stocks.”

Although he has attached a sample sheet of 49 accounts to show that sale of stocks from client accounts were far in excess of trading losses, he also admitted that such sales may be in hundreds of crores and that they were seeking the help of ‘eminent securities lawyers’ to fight the ‘illegal and wrongful sale of clients’ stocks’ on behalf of investors.