Gajendra Nagpal, founder & CEO of Unickon Securities (earlier known as Unicon Securities) was one of the elite stock pickers invited by Outlook Business to nominate his best stock pick for 2014.
Gajendra recommended Kaveri Seeds which was then quoting at Rs. 367 (adjusted for split). Today, Kaveri Seeds is at Rs. 963, which means that Gajendra and his followers are looking at fabulous gains of 167%.
However, things are not at all hunky dory for Gajendra Nagpal and Unickon.
According to a grim order dated 26th May 2014 passed by SEBI, Unickon Securities has committed two serious offences. One, it has diverted the funds received from its clients for its own personal purposes. Second, the securities received from the clients have been illegally pledged by Unickon to raise funds for its own purposes.
The result is that the poor clients of Unickon have been left in the lurch. They have neither the money nor the securities.
Gajendra Nagpal & Unickon have completely betrayed their trust.
The worst part is that SEBI records that Unickon Securities deliberately failed to co-operate with SEBI as well as NSE, BSE and CDSL during their respective inspections.
The ET has now revealed that Unickon may have defaulted to the tune of Rs 100 crore on the BSE and the National Stock Exchange (NSE). It is stated that Unicorn owes an estimated Rs 70-75 crore to NSE and over Rs 25 crore to the BSE.
ET also points out that there are more than 3,500 complaints that Sebi and exchanges have received against Unicon Securities from market players. Unicon is alleged to have used clients’ funds collected as margin money (for the derivatives trade) for other purposes. On several occasions, Unicon sold stocks lying with it in depository account of clients.
The worrying aspect is that Unickon is not the only one in the rogues gallery. The other defaulters include Prime Securities, which is run by ace stock picker, N. Jayaraman. Prime has challenged NSE in the court. Other brokers which are in the regulatory radar include Vasanti Securities, Royal International and Click2trade.
ET points out that there are a host of client complaints against stockbrokers with both Sebi and stock exchanges for misuse of funds mainly in the derivatives segment. It warns that more brokers could be pulled up or declared defaulters this year. There is a concern that stock exchanges have no mechanism to stop brokers from misuse of clients’ money and even the process of payment of client money after recovery from brokers is not time-bound.