MC Exclusive: SEBI orders reveal Asmita Patel's association with Sharekhan

On February 6, SEBI passed an interim-cum-showcause notice against Asmita Patel's trading school and connected entities after finding evidence that they were running an illegal investment advisory.

Asmita Patel, Director of the Asmita Patel Global School of Trading (APGST), was an Authorised Person (AP) of Sharekhan for a large part of the period when she was under investigation for running an illegal investment advisory.

Under SEBI norms, the broker has to ensure that its AP is in compliance with regulations. As guidelines released by the exchanges say, "The Trading Member (stock broker) shall be responsible for all acts of omission and commission of the Authorised Person."

In a February 6, 2025, order, the Securities and Exchange Board of India (SEBI) passed an interim-cum-showcause notice impounding nearly Rs 54 crore from APGST, its directors, and other connected entities after finding that they were running an illegal investment advisory under the garb of educational activities.

In the order, the regulator has noted that Patel, who was one of the directors of the trading school and an AP of Sharekhan, was asking students to open accounts with the brokerage.

Moneycontrol had sent a series of questions to Sharekhan to better understand their point of view. The queries were on the period during which Patel was an AP, the terms of engagement, complaints received about her activities, if any, additional checks the brokerage has put in place since the matter has come to light to ensure that such activities do not happen in future, and so on.

The brokerage has responded with a comment that Patel is not an AP with it any more and that it does not associate with APs who indulge in such practices.

A spokesperson from Mirae Asset Sharekhan said, "Asmita Patel is not an AP with us anymore as we do not associate with business partners who are involved in such malpractices, and the same is against our policies. As an intermediary, we take our responsibility of guiding in the right way very seriously. We educate our APs on regulations and customer protection on an on-going basis.”

While the February 6 order issued against the trading school does not identify the brokerage but only names it as ABC Ltd, when Moneycontrol checked the dates of this order against the dates of an earlier August 2024 order against Sharekhan, there were several overlaps.

These overlaps showed that Patel was the AP of the brokerage for at least a part of the time she was under investigation.

Also read: Asmita Patel's trading school pushed people to take loans, use others' money, quit jobs to trade: SEBI

What the overlaps revealed
The February 6 order examined the period between August 26, 2019, and October 31, 2023, and noted that Patel was the AP of the brokerage since 2016, and included details of an inspection of the AP's office conducted in January 2024. Therefore, Patel was the AP of this brokerage between 2016 and January 2024.

According to the  August 2024 order, as late as January 9, 2024, Patel was an AP of the brokerage. This order was passed after examining the control Sharekhan had over its AP's operations, and fined the brokerage Rs 4 lakh. The August order examined the period between April 1, 2022 and December 31, 2023; but the order also notes that on January 9, 2024,  Patel's office  was inspected by SEBI officials by virtue of her being a Sharekhan AP.

The January 9, 2024, inspection conducted by SEBI on the AP's premises is also mentioned in the February order against Patel, which  notes that during the inspection of her office, "it was seen that there was no proper segregation between the operations of Noticee No. 2 (Patel) in her capacity as the Authorised Person, from the operations of Noticee no. 1 (APGST).''

An AP cannot be associated with more than one broker on the same exchange, according to regulations. The AP can be affiliated with another stock broker only if the first one, with whom there is an existing affiliation, is not registered for trading in all or specific segments, according to an FAQ released by the National Stock Exchange (NSE). Sharekhan is present across all major segments, including equity delivery, intraday, derivatives, and futures.