Have been included in a Whatsapp group being run by a firm by the name of International Equity Fund (IEF), which claims that they are an advisory firm based out of Delaware, USA and has registered in India as a Foreign Portfolio Investor. Their website is https://iefey.com. They have launched a web based portal (IEF) wherein after enrolling with them one can deposit funds and buy stocks based on their recommendation. The onboarding process requires only Aadhar to be uploaded (no KYC being fetched by the firm as no OTP is received), but no requirement of PAN.
Their recommendations and support are in these categories:-
a) Stock recommendation in pre-market which is in upper circuit. Order is placed by investor in their portal and upper circuit is bought. Such stock cannot be bought in other broker terminal but possible in IEF application. Reason being given is that as FPI they use HFT terminals and even though stock is in UC, sell orders are available which get filled in micro seconds.
b) IPO application as institutional investor by pooling all the investors applying though their portal. Preferential allotment is received by these investors.
c) Block trading. Block deals offered in the market are applied for by this firm by pooling in funds of those investors that are interested in it.
All transactions of individual investors are executed by the investor himself in the portal. As the firm is investing in their own name, shares are probably held in their name and not in individual investor name. No demat account is being opened in the name of the investor and hence no records of shares bought by them are available with CDSL / NSDL. Is this allowed as per SEBI regulations?
There are other red flags as well such as the domain name https://iefey.com/ is registered in Sep 2016 and updated in June 2024 and shows registration State as Madhya Pradesh. Why would an entity claiming to be a US based advisor registered in India as FPI, have a domain name registered in Madhya Pradesh. All discussions are being done through the Whatsapp group and a few people (Professor Hardik Shah (mobile - 7043983189), Meera Patel (mobile - 7325897566) and a few others claiming to be representatives of this firm are conducting this. They are not reachable over telecom call and only through Whatsapp call.
On speaking to some of the existing investors, understand that they are able to deposit funds, buy shares, sell shares and withdraw funds smoothly. Overall this looks like an organised scam. The firm has sent across their SEBI registration certificate (INUSFP057816) and CDSL registration showing them to be registered as FPI.
Can someone guide on whether an entity is allowed to purchase shares on behalf of clients and hold it without crediting to their clients demat accounts. As far as I know such is not allowed unless the firm is registered as PMS / AIF. Also how would the taxation be managed as PAN is not being taken.
The details of the firm is:- International Equity Fund, 5th Floor, C Wing, Laxmi Towers, Bandra Kurla Complex, Bandra (East), Mumbai .
As this is a potential scam, would like to submit a complaint to SEBI. Has anyone submiitted a complain to SEBI and knows the process.