SEBI v. Guiness Securities Limited and others (broker misuse of client securities, 2022)

Judgment entered

Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In June 2022 a SEBI whole-time member found that the stock broker Guiness Securities Limited, run by two directors, had misappropriated client securities and diverted the sale proceeds through related entities over about a decade. He barred the broker, directors and related entities from the market for four to seven years and imposed penalties totalling Rs 4.4 crore.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEBI (India)
Date filed	2022-06-30
Date resolved	2022-06-30
Court	SEBI whole-time member
Status	judgment
Asset class	equities
Instruments	client securities held by a stock broker
Venue	NSE, BSE
Criminal parallel	No
Bars imposed	Guiness Securities Limited and Kamal Kumar Kothari: 7 years; Dharmendra Kothari and four related entities: 5 years; remaining penalised entities: 4 years; directors also barred from holding board or key posts
Defendants	Guiness Securities Limited (entity) ; Kamal Kumar Kothari (individual) ; Dharmendra Kothari (individual) ; S K B Securities Limited (entity) ; Param Commodities Private Limited (entity) ; Paramarth Agro Marketing Private Limited (entity) ; Apurva Commodities Private Limited (entity) ; Awadhoot Marketing Private Limited (entity) ; Superfast Tours and Travels Private Limited (entity) ; Shri Vishnu Krupa Commodities Private Limited (entity) ; Pawantar Agro Agencies Private Limited (entity)
Also named elsewhere	Guiness Securities Limited is named in 1 other matter
Techniques

What was ordered

Civil penalty: —
Disgorgement: —
Prejudgment interest: —
Total relief: —
Alleged gain: —
Penalty as published: 44m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

This final order of 30 June 2022 concerns Guiness Securities Limited (GSL), a stock broker and depository participant on the NSE, BSE and MSEI, its directors Kamal Kumar Kothari and Dharmendra Kothari, and 28 other directors, relatives and related entities, 31 noticees in all. It followed exchange inspection and a SEBI report in November 2018 that found irregularities at the broker, and an earlier interim order that had already barred many of them.

SEBI alleged that GSL failed to keep client money and securities separate, took clients' securities and used them for other purposes, and diverted the sale proceeds, with related companies used as conduits. The order finds this established, describing a breach of the fiduciary duty owed to clients, repeated over about a decade by GSL as carried out knowingly by its two directors, with losses to investors.

The directions bar GSL and Mr Kamal Kothari for seven years, Mr Dharmendra Kothari and four related entities for five years, and four other related entities for four years, counting the period already served under the interim order. The two directors are also barred from board or key posts, and the order freezes their assets and requires an asset inventory. Exchanges are to pay client claims first from recovered assets. Twenty other noticees, including individual directors with short or limited associations, were let off with cautionary advice because they had already been barred for over three years.

Penalties under section 15HA and, for GSL, section 23D of the Securities Contracts (Regulation) Act total Rs 4.4 crore: GSL Rs 1.5 crore and Rs 50 lakh, Kamal Kothari Rs 1 crore, Dharmendra Kothari Rs 75 lakh, and Rs 5 to 10 lakh on each of eight related entities.

The record does not show the total client losses, how much was recovered, or whether anyone appealed.

This library has no technique that fits a broker's misuse of client assets, so the matter is tagged with none. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

Timeline

2022-06-30 SEBI order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Record added October 8, 2026. submit a correction.