Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors.

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National Stock Exchange of India Limited Circular Department: Investigation Download Ref No: NSE/INVG/75388 Date: July 24, 2026 Circular Ref. No: 051/2026 To All NSE Members, Sub: Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. This has reference to SEBI order no. WTM/AS/WRO/WRO-DIV-3/32505/2026-27 dated July 24, 2026, where in SEBI has restrained following entities from buying, selling or dealing in securities or associating themselves with the securities market, either directly or indirectly, in any manner whatsoever until further orders, from the date of the said order: Noticee No. Noticee PAN 1. Surabhi Chauhan AOFPC0570C 2. Zahin Ismail Jessani AGNPJ2499P 3. Stark Investments AEJFS2830K 4. Starkblue Ventures LLP AERFS0106E 5. Shakuntala Davendra Singh DVJPS6011Q Further, SEBI has directed that, if the Entities have any open position in any exchange traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. Also, the Entities are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order. The detailed order is available on SEBI website - http://www.sebi.gov.in National Stock Exchange of India Limited Further, the consolidated list of such entities is available on the Exchange website http://www.nseindia.com home page at the below mentioned link: https://www.nseindia.com/regulations/member-sebi-debarred-entities Members are advised to take note of the above and ensure compliance. In case of any further queries, members are requested to email us at dl-invsg-all@nse.co.in. For and on behalf of National Stock Exchange of India Limited Vikram Narvekar Senior Manager Annexure: Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 1 of 44 WTM/AS/WRO/WRO-DIV-3/32505/2026-27 SECURITIES AND EXCHANGE BOARD OF INDIA EX-PARTE INTERIM ORDER UNDER SECTION 11(1), 11(4), 11B(1) AND 11D OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 In respect of – S. No. Name of the Entity PAN 1. Surabhi Chauhan AOFPC0570C 2. Zahin Ismail Jessani AGNPJ2499P 3. Stark Investments AEJFS2830K 4. Starkblue Ventures LLP AERFS0106E 5. Shakuntala Davendra Singh DVJPS6011Q (The above-mentioned Entities are hereinafter referred individually by their respective names / Entity No. and collectively as “Entities”) In the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and others. I. BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) was in receipt of 16 unique complaints alleging unregistered Investment Advisory (hereinafter referred to as “UIA”) activities and unregistered Portfolio Management Services (hereinafter referred to as “UPMS”) by Ms. Surabhi Chauhan, Mr. Zahin Ismail Jessani and/or through Stark investments and Starkblue Venture LLP. Stark Investments is a partnership firm of Mr. Zahin and Ms. Shakuntala (Mother of Ms. Surabhi Chauhan) with 50% controlling interest each. Ms. Surabhi and Mr. Zahin are the designated partners and authorised signatories in Starkblue Ventures LLP. 2. On perusal of the complaints, some of which were received from the partners of Starkblue Ventures LLP, it was prima facie observed that the Entities were engaged in providing investment advice and portfolio management services Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 2 of 44 without obtaining the mandatory SEBI Registration. The matter was taken up for detailed examination. The focus and purpose of the said examination was to ascertain whether the Entities were engaged in offering Investment advisory / Portfolio management services without obtaining the mandatory registration from SEBI, as statutorily required under the provisions of the Securities and Exchange Board of India Act 1992 (hereinafter referred to as the “SEBI Act”) read with the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 (hereinafter referred to as the “IA Regulations”) and the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020 (hereinafter referred to as the “PMS Regulations”). The said examination was also aimed at determining whether the acts of the Entities were in violation of provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the “PFUTP Regulations”) or any other rules and regulations framed by SEBI. 3. The examination of complaints prima facie revealed a common pattern of soliciting investments by Entity No. 1 and 2 from investors by entering into Investment Advisory Agreements through Entity No. 3 and operation of UPMS, either directly by Entity No. 1 and 2 and/or through Entities created/operated by them viz. Entity No. 3 and 4. The investors were tempted to invest on the basis of representations claiming the use of proprietary quantitative models, algorithm-based trading systems, stringent risk-management protocols and assured downside protection. For supporting their claims, performance(s) of the funds recommended by the Entities were shared with investors on a quarterly basis indicating better returns as compared to the benchmarks such as Nifty-50. The investment recommendations to the investors relating to investment products including securities were provided on a regular basis through Whatsapp chats and Excel spreadsheets, performance reports, etc. The activities were carried out in such a way and manner that gave a reasonable impression to the investors of a formalised business activities. 4. The examination also revealed that in order to solicit investments from various investors, a purported exclusive partnership was also offered to them in Starkblue Venture LLP, which claimed to offer high returns with lower volatility. The investments were solicited and marketed under the name “SQAR” (Stark Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 3 of 44 Quantitative Absolute Return) Strategy. The investors were made as partners in the firm (Entity No. 4) and the funds were mobilised from them, which were pooled into a common corpus in the name of Starkblue Venture LLP and managed under a common investment strategy. Entity No. 1 and 2 were the designated partners of the said LLP and all material decisions relating to deployment of funds, execution of trades, risk management and operation of the investment strategy remained under their control. The investors, on the other hand, merely remained the passive contributors and had no role in the day-to-day management and control of the common investment corpus. 5. It was also noted that on several instances, investors were prompted to open their trading accounts with SEBI registered Stock Brokers such as IIFL, Zerodha, etc. and thereafter their account credentials including the user name, passwords, email access and/or OTPs details were procured by Entities No. 1 and 2. 6. To summarize, the following modus operandi (discussed in detail in later part of the Order) was adopted by entity No.1 and 2 through their Entities viz. Entities No. 3 and 4. a) From September 2020, prospective clients were on-boarded and UIA Services were provided to them. For allegedly providing investment advisory services, mandate agreements were signed with the clients. b) Allegedly, UPMS were also provided by Entities No.1 and 2 to their clients by offering account handling services. For providing these services, investors/clients were solicited to share their trading account login credentials including user ids, passwords and OTPs. c) Subsequently in February 2022, Starkblue Venture LLP was incorporated with Entities No. 1 and 2 as the designated partners. Through Starkblue Venture LLP, exclusive partnership(s) were allegedly offered to the clients/investors and money was mobilized from them in exchange for the purported partnership. The monies were collected in the name of Starkblue Venture LLP and invested in the securities market. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 4 of 44 II. ISSUES FOR CONSIDERATION AND PRIMA FACIE FINDINGS 7. On a perusal of various agreements and marketing materials, which were gathered during the examination, particulars of bank accounts, bank statements, correspondences with the investors/clients, MCA database, and other material on record, the following issues arise for determination in the instant matter. A. Whether the services offered by the Entities constitute investment advisory activities and/or portfolio management services? B. If the answer to issue A is in the affirmative, whether the Entities have prima facie violated any provisions of the SEBI Act, IA Regulations, PMS Regulations and PFUTP Regulations? C. If the answer to issue B is in the affirmative, what directions are required to be issued against the Entities for the prima facie violations? 8. I shall now deal with the above mentioned issues in light of the material brought on record pursuant to the preliminary examination conducted in the matter. 9. Examination revealed that Surabhi Chauhan and Zahin Jessani were carrying out their activities through Stark Investments by executing mandate agreement(s) with their clients. On perusal of one of the said mandate agreement, the following has been noted: 9.1. The mandate agreement was written on the purported letterhead of M/s Stark Investments. On one instance, it was noted that the said agreement was shared with one of the clients by Surabhi Chauhan through her email-id - Surabhi@stark-investments.in, which was also CCed (i.e., copy marked) to Zahin Ismail Jessani email id- zaheen@stark-investments.in. 9.2. The subject of the said agreement was “Mandate to act as financial advisor to XXXX (“the Client”) pertaining to investment planning and management activities’’. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 5 of 44 9.3. M/s Stark investments was referred to as the advisor in the said mandate agreement. It was, inter alia, mentioned that this letter sets out the terms and conditions (“terms”) of the mandate agreement (“the mandate”) in terms of which M/S Stark Investments (herein after referred to as the “Advisor”) will act as a financial advisor for the client. 9.4. It had a section named as “Mandated Task” which, inter alia, outlines the responsibilities of Stark Investments. The said tasks are as under: i. To understand the client’s investment objectives and constraints. ii. Perform investment planning and management. iii. Prepare dynamic and optimal asset allocation strategy as per risk profile. iv. Regular quarterly review of investment portfolio with appropriate re- balancing Activity. v. Recommend and advise in the selection of appropriate investment opportunities across asset classes. vi. Real-Time resolution of queries and clarifications on the investment portfolio. 9.5. The details of the fees along with the bank account details were mentioned on the mandate agreement along with the fact that the fees were required to be paid at the beginning of the service. It was also mentioned that the mandate would be auto-renewed every year and can be terminated by either party by giving one-month notice. 9.6. The names of both Ms. Surabhi and Mr. Zahin were mentioned as Partners and the said mandate agreement was signed by Ms. Surabhi. 10. In addition to the above, it was noted that Ms. Surabhi and Mr. Zahin had shared a document titled “Stark Investments-Comprehensive Investment, Retirement and Tax Planning Package” with prospective clients/investors. On perusal of the said document, which appeared to be a marketing material, the following is observed: 10.1. An overview of Stark Investments was provided, inter alia, mentioning that it was an investment advisory and management company catering to Indian and NRI Clientele and was driven by a team of highly experienced Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 6 of 44 professionals (over 50 years of cumulative experience) comprising CFA’s, CFTs and MBAs with deep domain expertise. 10.2. The document highlighted the below features of Stark Investments: i. Innovative Products- Bouquet of innovative products to suit the requirements and needs of clients; ii. Proprietary Stock Picking Model- Proprietary stock picking model based on quant investing complemented by in-house developed algorithms; iii. Multi Asset Strategy- Multi asset allocation strategy to ensure proper portfolio diversification and exposure; iv. Superior Returns and Alpha- Deliver Sustainable and consistent return over and above the benchmark; v. Risk management- Active risk management processes via position sizing and active corporate governance monitoring. 10.3. The document had a section on their advisory services and fee structure. The relevant screenshot of the document is as below: Image No. 1. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 7 of 44 10.4. As per the document, Stark investments claimed to offer advisory on varied asset and sub-asset classes with an objective to create a highly diversified portfolio to mitigate any systematic risk on any particular asset class, and at the same time ensuring higher portfolio returns. The screenshot of the document highlighting the same is as under: Image No. 2. 10.5. Stark Investments claimed to offer customized advisory process to its clients. The screenshot of the document highlighting the same is as below: Image No. 3. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 8 of 44 10.6. As per the document, Stark investments, inter alia, advertised itself as an entity with superior skills having a proprietary quant investing model, highly qualified team, stringent risk management process, etc. as highlighted below. Image No. 4. 10.7. Pertinently, the said document featured both Mr. Zahin Jessani and Ms. Surabhi Chauhan as the key management team of Stark Investments. For Mr. Zahin Jessani, it was written that he had more than 10 years of experience in financial sector (investment banking, deal making, equity research) and has worked with E&Y, FirstRand Bank, Centrum Capital and HDFC Bank. For Ms. Surabhi Chauhan, it was written that she had more than 10 years of experience in financial markets with focus on equity research and asset management and she has worked with JP Morgan, Jeena Logistics (Family Office), Kotak Securities and Alchemy Capital. 11. Further, it was noted that after on-boarding of the clients, Ms. Surabhi and Mr. Zahin, through Stark Investments, provided advice in the form of buy/sell recommendations to their clients/investors through WhatsApp Chat. Few instances of giving recommendation through WhatsApp Chat are detailed in subsequent paragraphs: Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 9 of 44 Whatsapp chat with one of the client - Ankit Pipersaniya [7/19/24, 9:06:43 AM] Ankit: Jamnaauto to buy bse or nse? [7/19/24, 9:22:07 AM] Surabhi Stark: NSE ; [7/19/24, 9:22:16 AM] Surabhi Stark: Also add GMR infra worth 3 lacs [7/19/24, 9:44:55 AM] Surabhi Stark: Put at 126 [7/19/24, 11:18:49 AM] Ankit: Is it ok to proceed with above risk on gmrinfra? [7/19/24, 11:57:25 AM] Ankit: Can you please confirm above. [7/19/24, 12:26:21 PM] Surabhi Stark: Yes, proceed. [9/18/24, 2:37:35 PM] Surabhi Stark: Add 2 lacs worth Ahlada engineers today [9/18/24, 2:37:58 PM] Surabhi Stark: Add 2 lacs worth jamna auto too [9/18/24, 2:39:09 PM] Surabhi Stark: Add 2 lacs worth reliance infra [9/18/24, 3:05:34 PM] Surabhi Stark: Buy apollo micro system [9/18/24, 3:05:38 PM] Surabhi Stark: 2 lacs worth. [12/31/24, 12:10:49 PM] Surabhi Stark: Hi buy 2-3 lacs worth of IGIL [12/31/24, 12:39:04 PM] Ankit: Done. [8/21/24, 8:51:57 AM] Surabhi Stark: This message was deleted. [8/21/24, 9:01:31 AM] Ankit: How much? [8/21/24, 9:02:25 AM] Ankit: <attached: 00000391-PHOTO- 2024-08-21-09-02-25.jpg> [8/21/24, 9:05:40 AM] Surabhi Stark: Buy worth 3 lacs [8/21/24, 9:07:51 AM] Ankit: Ok [8/21/24, 9:13:45 AM] Surabhi Stark: Buy 500 qty [8/21/24, 9:14:48 AM] Surabhi Stark: U can buy around 9.30/9.45 am. 11.1. From the above chats, it is noted that on July 19, 2024, Ms. Surabhi had advised Mr. Ankit to buy scrip of GMR Infra at ₹126. On September 18, 2024, she advised Mr. Ankit to purchase scrip of Ahlada Engineers, Jamna Auto, Reliance Infra and Apollo Mircrosystem. On December 31, 2024, she advised to buy scrip of IGIL worth ₹2-3 lakhs. On August 21, 2024 Ms. Surabhi was seen to be giving recommendation to buy 500 shares of Prajind during 9:30- 9:45 AM. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 10 of 44 Whatsapp chat with one of the client - Pulkit Gupta 28/09/20, 09:54 - Zaheen Equity Investment: Buy welspun 28/09/20, 09:54 - Zaheen Equity Investment: At cmp 28/09/20, 09:54 - Zaheen Equity Investment: Target of 72. 28/09/20, 11:01 - Zaheen Equity Investment: Buy Astec, Neuland and Dr Reddy for delivery 28/09/20, 11:01 - Zaheen Equity Investment: At CMP 11.2. On September 28, 2020, Mr. Zahin was seen to be giving recommendation to buy scrip of Welspun at current market price with target of ₹72. On September 28, 2020, he recommended to buy scrip of Astec, Neuland and Dr. Reddy at current market price for delivery. 11.3. Ms. Surabhi and Mr. Zahin had created a Whatsapp group for one of their client, Mr. Anurag Pandey and his wife Ms. Samidha Sharma. The group was named “FP- Anurag and Family” with its members as Mr. Anurag Pandey, Ms. Samidha Sharma, Mr. Zahin Jessani and Ms. Surabhi Chauhan. From the WhatsApp chats, it is observed that Surabhi Chauhan/Zahin Jessani were giving out recommendations to buy/sell securities. Relevant extract of the whatsapp chat is reproduced below: 12/5/22, 11:09 AM - Surabhi Chauhan: @Anurag put sell order for NLC india @95 12/5/22, 11:09 AM - Surabhi Chauhan: Current price is 91. 5/11/23, 11:39 AM - Zaheen Jesani: @Anuragplease buy UPL worth 1 to 1.25 lakhs. 8/4/23, 3:58 PM - Zaheen Jesani: Your subscription fees are due.. Request you to kindly make the payment 8/4/23, 4:26 PM - Wifey: what fee? 8/4/23, 5:13 PM - Surabhi Chauhan: Quarterly advisory fees 8/9/23, 10:39 AM - Zaheen Jesani: Can buy Mtar at current price 8/21/23, 12:46 PM - Zaheen Jesani: Can buy Campus Activewear at 315 : : 8/24/23, 10:11 AM - Zaheen Jesani: Buy Shriram Finance at 1900-10. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 11 of 44 11.4. It can be seen that on May 05, 2022, Ms. Surabhi gave recommendation to sell scrip of NLC India at ₹95. On May 11, 2023, she gave recommendation to buy scrip of UPL. On April 08, 2023, Mr. Zahin and Ms. Surabhi can be seen asking for payment of advisory fees. 12. During the examination, it was also noted that Ms. Surabhi Chauhan, Mr. Zahin Jessani and/or through Stark Investments were providing account handling services. Such services were offered/provided pursuant to the execution of an Investment Advisory Agreement. In the said agreement, Stark Investments claimed itself to be the ‘Advisor’. The agreement(s) were executed between the advisor i.e. Stark Investments and the client(s) and it sets forth the terms and conditions with regard to the investment management services which the advisor would provide to the clients. 13. On perusal of one such ‘Investment Advisory Agreement’, the following salient terms and conditions have been observed: 13.1. It had various sub-sections including 1. Advisor’s Responsibilities 2. Clients’ Responsibilities, 3. Client’s understanding, 4. Fees and Expenses, 5. Custody of assets etc. 13.2. Under Advisor’s Responsibilities, inter alia, the following was stated: Advisor’s Responsibility “Client has hired the Advisor to act his investment advisor to perform the services described in the agreement. Specifically, Clients grant advisor full power to direct, manage and change the investment of the assets in the client’s account, the proceeds and any additions. Advisor authority over client’s investment includes discretionary authority to purchase and sell securities for client’s account in accordance with client’s objective as client has communicated them to advisor, to submit aggregated trade orders for client and others in order to obtain best execution, and to give instructions Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 12 of 44 concerning these transactions to broker-dealer(s) and other custodian with which client’s account(s) are held. Advisor will invest client’s account in securities of any kind, including common or preferred stocks, warrants and rights. Advisors may hold all or a portion of clients account in cash. The advisor has complete authority over the selection, buying and selling securities, without obtaining specific client consent as long as such activity is consistent with restrictions and conditions the client has placed on the management of client’s asset. The advisor shall have complete authority to determine the numbers of securities bought or sold. After obtaining prior consent from the client, the advisor can borrow funds from the custodian holding the account for the purpose of trading on margin and to execute such assignments… The Advisor is authorized to receive incentive fees after mutually agreeing with the client at the end of review period.” 13.3. Under Client ’s Responsibilities, inter alia, the following was stated: … “Client agrees to notify advisor before making any withdrawals or transfer client’s account to allow advisor to manage the impact of the withdrawal on advisor’s trading in the account. ...If clients want to make a particular investment that Advisor did not recommend using funds in the advisor-managed account, client must withdraw the funds needed before making the investment to eliminate any question of responsibility for the performance of this investment...If during the terms of this agreement, advisor purchases specific individual securities for the account at the direction of client, client acknowledge that advisor shall do so as an accommodation only and client shall maintain exclusive ongoing responsibility for monitoring these individual securities and their disposition…” Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 13 of 44 13.4. In the fees and expenses section, customized fees structure was offered to various clients. The minimum amount required to start the advisory ranged from ₹15 Lacs to ₹30 Lacs with top up plans. Profit sharing model was offered which also differed from client to client. One of the sample illustration of such profit sharing model is as below. Image No. 5. 13.5. There was a stipulation in the agreement that the advisor (Stark Investments) was authorized to direct and place all order for execution of transactions with or through the client appointed custodian and would give instructions to the custodian with respect to all investment decisions regarding the assets, etc. 14. Similar to the marketing material ‘Comprehensive Investment, Retirement & Tax Planning Package’ as discussed above, Stark Investments also shared another document viz. ‘Profit shared managed account module’ with its clients as marketing material. The salient features of the said document are as follows: 14.1. Similar to Paragraph 10.1 (a) and (b) an overview of Stark Investments was provided, inter alia, mentioning that it is an investment management company driven by a team of highly experienced professionals. The document Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 14 of 44 highlighted the features like Innovative Products, Proprietary Stock Picking, Model Multi Asset Strategy, Superior Returns and Alpha and Risk management. 14.2. As per the said documents, Stark investments used combination of fundamental and technical factors and parameters as can be seen below: Image No. 6. 14.3. A description of ‘profit sharing managed account’ offered by Stark Investments as mentioned in the marketing material is as below. Image No. 7. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 15 of 44 14.4. It also provided a sample portfolio performance snapshot with claims of consistent track record of delivering alpha as compared to the benchmark over a period of 5+ years. It also claimed some of their success stories by highlighting the individual stock picks and the performance of those stocks. Image No. 8. Image No. 9. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 16 of 44 15. For the purpose of managing the demat account of the clients, WhatsApp group(s) were created comprising the clients and Ms. Surabhi Chauhan and Mr. Zahin Jessani. Some of the sample chats of Ms. Surabhi / Mr. Zahin with their clients are as below: Chats with Ankit Pipersaniya and his wife, Swati Jain [11/6/22, 3:01:12 PM] Surabhi Stark: Surabhi Stark created this group [11/6/22, 3:01:12 PM] MA - Ankit + Swati: Surabhi Stark added you [ [ [11/6/22, 3:01:30 PM] Surabhi Stark: I have created a common grp [11/6/22, 3:01:46 PM] Surabhi Stark: For communication [ [11/6/22, 3:02:41 PM] Surabhi Stark: @Zahin Jesani Stark share the process of account opening in IIFL for Swati [11/6/22, 3:02:56 PM] Surabhi Stark: Ankit will start with 10 lacs first and then in next 3 months he will top up [11/6/22, 3:03:07 PM] Surabhi Stark: Ankit will share the managed account draft with u [11/6/22, 4:45:48 PM] Swati : You added Swati [11/6/22, 5:33:39 PM] Surabhi Stark: Ankit & Swati I have [11/6/22, 5:33:49 PM] Surabhi Stark: Emailed the signed managed account agreement [11/6/22, 5:34:03 PM] Surabhi Stark: You guys can go through it and send us the counter signed scan copy [11/6/22, 5:53:07 PM] Ankit: Sure will send back the signed copy : : [11/7/22, 10:34:58 AM] Zahin Jesani Stark: Please use this link to open your IIFL account [11/7/22, 10:34:59 AM] Zahin Jesani Stark: Basic KYC details required.will not take more than 10-15 minutes : [11/7/22, 10:36:45 AM] Zahin Jesani Stark: My name is Zahin Jesani [11/7/22, 10:37:51 AM] Ankit: Hi Zahin, I will create the account and will share the details in late evening today including the signed copy of agreement [11/7/22, 10:40:53 AM] Zahin Jesani Stark: Thanks [11/8/22, 3:12:13 PM] Zahin Jesani Stark: Hi any update on the account opening?? Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 17 of 44 [11/8/22, 9:38:59 PM] Surabhi Stark: Ankit we have received the counter signed agreement . [11/8/22, 9:39:25 PM] Surabhi Stark: For account opening please get it done by Tom. It takes 10 mins [ [11/11/22, 9:03:52 AM] Zahin Jesani Stark: Can you shared the login id. [11/15/22, 4:02:42 PM] Zahin Jesani Stark: Hi Ankit.. what is your login id/client code for your IIFL account: : [11/15/22, 4:14:52 PM] Surabhi Stark: Please share the login details [11/15/22, 4:14:54 PM] Surabhi Stark: In the email [11/15/22, 4:15:01 PM] Surabhi Stark: And in the grp [11/15/22, 4:15:21 PM] Surabhi Stark: Once it’s done then do top up the account with funds. [11/15/22, 4:51:48 PM] Ankit: I already did the top up [11/15/22, 4:51:56 PM] Ankit: Is it a problem? [11/15/22, 4:58:02 PM] Surabhi Stark: Swati jain account [11/15/22, 4:58:08 PM] Surabhi Stark: @Zahin Jesani Stark please confirm [11/15/22, 4:59:32 PM] Ankit: Yes [11/15/22, 6:08:39 PM] Zahin Jesani Stark: Ankit have you opened two accounts... [11/15/22, 6:08:58 PM] Zahin Jesani Stark: One in your name and one in Swatis name? [11/15/22, 6:10:08 PM] Zahin Jesani Stark: Swatis account got mapped to a wrong RM. We are re-mappining that : : [11/17/22, 9:15:12 PM] Ankit: Have you got all the access needed fir the investment to start [11/18/22, 11:27:28 AM] Zahin Jesani Stark: Swati's account should get mapped by today. The account is opened its just not mapped to our code yet : [11/25/22, 11:43:24 AM] Zahin Jesani Stark: Swati's account is up and running [11/25/22, 1:11:56 PM] Zahin Jesani Stark: @Swati you would have received an SMS from IIFL with your login password [11/25/22, 1:12:01 PM] Zahin Jesani Stark: Can you please share that [11/25/22, 4:48:18 PM] Swati : Sorry [11/25/22, 4:48:32 PM] Swati : Can u plz send again [11/27/22, 12:56:52 PM] Zahin Jesani Stark: @Swati can you share the sms with password [11/27/22, 12:56:57 PM] Zahin Jesani Stark: It would have come now from IIFL Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 18 of 44 15.1. It can be seen from the above chats that Ms. Surabhi and Mr. Zahin created a Whatsapp group for communication with the clients. The chats demonstrate the purpose of group, initiation of process of opening of demat account, investment amount, sharing of login details including password and OTPs were discussed. Whatsapp chats with Aditya Singh Image No. 10. Image No. 11. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 19 of 44 15.2. The chats above show that login details including passwords and OTPs were procured by Mr. Zahin and Ms. Surabhi. 15.3. Also, on one occasion, Ms. Surabhi, through her email-id Surabhi@stark-investments.in, was seen to be advising the client about the process of opening of demat account and further seeking the account details. Mr. Zahin was also CCed (copy marked) in the email and was the contact person for providing assistance in opening of trading account. Later, credentials of the trading account including user name and password were shared by the client with Ms. Surabhi and Mr. Zahin. The screenshot of the email extract is reproduced below: Image No. 12. Image No. 13. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 20 of 44 16. During the examination, another entity viz. Starkblue Ventures LLP was observed to be giving various services. In relation to the bank account details shared by the complainants, the account opening form (AOF) and KYC records for account no - 697805600839 were sought from ICICI Bank. It was noted that the said account was opened in the name of Starkblue Venture LLP with Mr. Zahin Ismail Jessani and Ms. Surabhi Chauhan being named as the Designated Partner(s) and Authorised Signatories. 17. The material gathered during the examination also revealed that Ms. Surabhi and Mr. Zahin used to conduct video conferences wherein Starkblue Venture LLP was pitched as a fund which applies a SQAR strategy that has generated good market returns. One such instance where google meet link was shared by Ms. Surabhi with one client is as given below. Image No. 14. 18. During such meetings, a SQAR factsheet and a draft agreement were shared with the prospective clients. Various details and strategies used by the fund and its structure including its past performance were shared and discussed with the prospective clients. The clients were offered an exclusive partnership in the said LLP with details such as minimum contribution and lock-in requirements. A Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 21 of 44 screenshot of sharing of SQAR factsheet and draft agreement shared in the WhatsApp is as placed below. Image No. 15. 19. On perusal of the SQAR factsheet, inter alia, the following is noted. 19.1. “SQAR” stands for “Stark Quantative Absolute Return Strategy” which was, inter alia, marketed as active equity and derivative market non-directional strategies with superior and consistent absolute returns (targeting gross ₹ returns of 16-18%). Claims were made that it was a medium risk profile strategy with low downside volatility. Further, various details of the strategy, its overview, return analysis, track record and comparison with various benchmarks were mentioned. Few of the screenshots from the fact sheet are as below. Image No. 16. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 22 of 44 Image No. 17. Image No. 18. 19.2. The screenshot indicating that the SQAR strategy was available in Starkblue Ventures LLP pool structure along with minimum contribution, lock Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 23 of 44 in requirement, periodic review is placed below. It is also noted that such strategy was offered or claimed to be offered through reference only. Image No. 19. 19.3. It was gathered that one of the common themes noticed by all the clients/prospective investors was that they all were communicated that investment in Starkblue Venture LLP is an exclusive partnership claiming to offer high returns with lower volatility. It was claimed that their trading system was computer-driven and capable of limiting losses to not more than 10%. One such WhatsApp Communication between an investor (Mr. Avinash Hemdeva) and Ms. Surabhi Chauhan can be seen below. It is seen that assurance is being given that the money is protected up to Max 10% or the maximum drawdown is 10%. Image No. 20. 20. Starkblue Venture LLP entered into LLP agreement(s) with the investors (partners). The following is noted from one of such LLP agreement(s): 20.1. Ms. Surabhi Chauhan and Mr. Zahin Jessani were identified as designated partners of Stark Venture LLP in the agreement. 20.2. Various clause(s) of the agreement are reproduced as below: The primary purpose of the LLP shall be: 2. “To act as Consultants and advisors on all matters in the field of management, regulatory and secretarial activities, finance, investment, Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 24 of 44 trade, and commerce and to investigate engage in research, collection and preparation and dissemination of Information and statics relating to business or industry. Whether in India or abroad, including reports on economic, political and financial trends and the on feasibility of investments/divestment; and To carry on business as advisors collectively referred to as “persons or entities or both local as well as offshore including investments in shares, commodities, currencies, debentures, bonds, depository receipts, options, derivatives, government securities & financial instruments. (Primary Business). In addition to the aforesaid, the LLP shall also undertake the business activities Listed in Schedule 1 (“other Business"). The Primary Business and the Other Business of the LLP shall be collectively referred to as "Business’ The LLP shall obtain such registrations and accreditations with regulatory authorities and governing bodies as may be required by applicable Laws to carry on the Business. In addition to the above, the LIP may also engage in any and activities which are ancillary incidental to the business. 3. The LLP shall have its registered office at 301, Tideways, St. John Baptist Road, Bandra West, Mumbai 400051 and/or at such other place or places, as may be agreed to by the Majority of Partners from time to time. … … 7. The profits of LLP for distribution will be arrived after considering all requisite accounting treatments including 25% of profits (Plus GST, wherever applicable) as fixed fees to be paid to Stark Investments, a Partnership Firm, as professional fees for management of business of LLP. 14. On and from the Effective Date, Ms. Surabhi Chauhan and Mr. Zaheen Jessani, shall be the Designated Partners of the LLP. The Designated Partners shall carry on the management of the LLP on behalf of all the Partners, in the name of the LLP and shall do all acts, matters and things that are required to be done by the LLP in respect of compliance with the provisions of the LLP Act or any other law for the time being in force and shall also be responsible for the operations and conducting the affairs of the LLP. The Designated Partners shall file all documents, returns, statements and the like pursuant to the provisions of the LLP Act or any other law for the time being in force or as may be required by this Agreement and shall be subject to the penalties applicable to the Designated Partners set out in Section 8 of the LLP Act. SCHEDULE 1 OTHER OBJECTS 9.To borrow and/or accept shares, stocks, debentures, bonds, units of mutual funds and other securities for further placement as margins from the Partners and other entities. .. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 25 of 44 11. To trade in shares, commodities, currencies, debentures, bonds, depository receipts, options, derivatives, government securities, other securities & financial Instruments. 14. To invest and deal with moneys of the LLP in immovable properties, shares, stock, bonds, debentures, obligations or other securities of any company or association or in Government Securities or in current or deposit account with banks or on the of mortgage of immovable properties of any tenure or on the pledge of movable property of in any other manner as may from time to time be determined by the Designated Partners of the LLP for the time being and from time to time, sell or very all such investments and execute all assignments, transfer, receipts and documents that any be necessary in that behalf. 17. To undertake the business of trading in securities and engage into transaction in the nature of hedging, trading, futures, forwards, options in derivatives of securities and Indexes for the purpose of trading, investment, hedging, arbitrage, or any other purpose, whether in India or abroad. 21. It is observed that all the trades of Starkblue Venture LLP were placed through Stock Broker – IIFL Securities Ltd. Trading and KYC details of Starkblue Venture LLP were sought from IIFL Securities Ltd. which showed that both Mr. Zahin and Ms. Surabhi Chauhan were nominated as authorised persons. A brief of the trading across all segments from June 03, 2022 to June 30, 2025 is given below: Table No. 1. Sr. No Segment Buy(₹) Sell(₹) 1 Equity 1,68,49,16,864.70 1,66,59,07,260.82 2 Equity Derivative 14,27,26,95,888.35 14,20,15,44,456.40 3 Currency Derivative 5,73,69,344.15 5,72,96,860.25 4 Commodity Derivative 18,65,65,19,177.50 18,53,21,18,595.00 Examination of Bank accounts and statement(s). 22. The payments from the clients were received by the below mentioned Entities in the accounts mentioned in the Table below: Table No. 2. Sr.No Bank Account Number Bank Name Held by 1 921020009044605 Axis Bank Stark Investments 2 912010031869909 Axis Bank Zahin Jessani 3 40379331557 SBI Surabhi Chauhan 4 4111140091217 HDFC Bank Surabhi Chauhan Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 26 of 44 23. The AOF and KYC details were sought from these banks. A perusal of the bank statements revealed that terms such as “Fees”, “advisory”, “stocks”, “consult”, “consultancy”, “subscri”, “equity”, “trading”, “advi”, “portfolio” and “investment” are frequently appearing in the bank account(s). The following was specifically noted w.r.t. these accounts. 23.1. Bank Account no – 921020009044605 held with Axis bank in the name of Stark Investments: On perusal of the AOF and KYC documents obtained from the bank, the following has been noted. 23.1.1. Stark investments is a partnership firm with Mr. Zahin and Ms. Shakuntala Devendra Singh as the partners with 50% controlling interest held by each of them. 23.1.2. Both the partners are the authorised signatory of the said bank account. 23.1.3. The line of activity has been mentioned as ‘Financial Investment Consultant’. 23.2. On perusal of the partnership deed provided for the opening of the said bank account, the following is noted. 23.2.1. The partnership deed was made in the month of February 2021 but for all practical purposes, the business of the partnership was deemed to have commenced from January 10, 2021. The duration of the partnership was ‘at will’ 23.2.2. Both the partners shall be working partners and shall diligently attend to and carry on the business and affairs of the partnership. 23.2.3. Both the partners shall equally share the profits and losses of the firm in the ratio of 50:50. 23.2.4. The bank account(s) of the partnership shall be managed either jointly or severally by the partners, as may be mutually decided from time to time. 23.2.5. Ms. Surabhi Chauhan daughter of Ms. Shakuntala Devendra Singh was mentioned as her nominee. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 27 of 44 23.3. For the period of March 13, 2021 (Account opening date) to June 30, 2025, after adjusting for personal transactions, an amount of ₹6,22,56,908.95 is taken as the amount collected from the UPMS/UIA activities in the bank account of Stark Investments 23.4. Bank account no. - 912010031869909 held with Axis Bank belonging to Mr. Zahin Jessani: After excluding personal transactions in aforesaid bank account with remarks such as salary, tax refunds, etc. an amount of ₹1,29,74,143.77 is taken as the amount collected towards UPMS/UIA activities for the period from September 01, 2020 to June 30, 2025. 23.5. Bank Account no – 4111140091217 held with HDFC bank belonging to Ms. Surabhi Chauhan: After excluding personal transactions with remarks such as interest, rent, etc. for the period from September 01, 2020 to June 30, 2025, an amount of ₹57,86,078.27 as the amount collected towards UPMS/UIA activities. 23.6. Bank Account no - 40379331557 held with SBI belonging to Ms. Surabhi Chauhan: After adjusting for personal transactions, it is observed that for the period from August 20, 2021 (Account opening date) to June 30, 2025, an amount of ₹1,11,69,616.82 was collected in its said account towards UPMS/UIA activities. 23.7. To summarize, the total amount mobilized in the aforesaid bank accounts is as per the Table below: Table No. 3. Sr. No Bank Account Number Bank Name Held by Credit amount for unregistered services 1 921020009044605 Axis Bank Stark Investments ₹6,22,56,908.95 2 912010031869909 Axis Bank Zahin Jessani ₹1,29,74, 143.77 3 40379331557 SBI Bank Surabhi Chauhan ₹1,11,69,616.82 4 4111140091217 HDFC Bank Surabhi Chauhan ₹57,86,078.27 Total ₹9,21,86,747.81 Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 28 of 44 Analysis of the facts in light of the applicable legal Provisions 24. After going through the material gathered during the examination and the aforesaid discussion, I now proceed to examine the services/activities offered/provided by Ms. Surabhi Chauhan, Mr. Zahin Jessani and/or through Stark investments and Starkblue Ventures LLP in light of the relevant provisions of SEBI Act, IA Regulations, PMS Regulations and PFUTP Regulations, which are reproduced below: Section 12(1) of SEBI Act; “No stock broker, sub broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act:” Regulation 2(1)(l) of the IA Regulations “investment advice means advice relating to investing in, purchasing, selling or otherwise dealing in securities, and advice on investment portfolio containing securities, whether written, oral or through any other means of communication for the benefit of the client and shall include financial planning: Provided that investment advice given through newspaper, magazines, any electronic or broadcasting or telecommunications medium, which is widely available to the public shall not be considered as investment advice for the purpose of these regulations;” Provided further that trading calls shall not be considered as investment advice for purpose of these regulations.” Regulation 2(1)(m) of the IA Regulations “investment adviser means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 29 of 44 persons and includes a part-time investment adviser or any person who holds out himself as an investment adviser, by whatever name called; Regulation 3(1) of the IA Regulations Application for grant of certificate. “On and from the commencement of these regulations, no person shall act as an investment adviser or hold itself out as an investment adviser unless he has obtained a certificate of registration from the Board under these regulations:” Regulation 2(1)(o) of PMS Regulations “Portfolio manager” means a body corporate, which pursuant to a contract with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or goods or funds of the client, as the case may be: Provided that the Portfolio Manager may deal in goods received in delivery against physical settlement of commodity derivatives.” Regulation 3(1) of the PMS Regulations Registration as portfolio manager. “No person shall act as a portfolio manager unless it has obtained a certificate of registration from the Board under these regulations.” Prima facie Violation of IA Regulations: 25. In terms of Regulation 2(1)(l) of the IA Regulations, ‘Investment advice’, inter alia, means advice relating to investing in, purchasing, selling or otherwise dealing in securities and includes financial planning. In context of the present case, it is noted that Ms. Surabhi Chauhan and Mr. Zahin Jessani and/through Stark investments, used to enter into ‘mandate agreements’ with their clients. Some of the terms and conditions of the said agreements have already been discussed above. It is noted that as per the mandate agreement(s), stark investments claimed to act as the financial advisor of the clients. The mandated task as per the agreement was to understand client’s investment objectives and to perform their investment planning. The task was also to prepare dynamic and optimal asset allocation and Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 30 of 44 recommend and advise in selection of appropriate investment opportunities across various asset classes. 26. Stark investments, claiming to be an investment advisory and management company also offered a comprehensive retirement and tax planning package to its clients. Its product offering clearly mentioned that it provided advice on varied asset and sub- asset classes. It was claimed that it had a proprietary stock picking model and advertised itself as an entity with superior skills, highly qualified team, stringent risk management process, etc. It claimed to offer customized advisory services emphasizing on unique needs of each client based on goal and risk profiling of the clients. 27. It is also noted that there is evidence in the form of Whatsapp chats with multiple clients, wherein it is clear that Ms. Surabhi Chauhan and Mr. Zahin Jessani were providing investment tips. On perusal of some of the WhatsApp chat transcripts as mentioned earlier, it is observed that specific investment recommendations were provided to the clients, including Identification of securities, exact quantities, price ranges, timing of execution and instructions to buy, sell, hold, average, or book profits. 28. Thus, from the mandate agreement, marketing material and Whatsapp chats, it prima facie appears that the services offered by Ms. Surabhi Chauhan, Mr. Zahin Jessani, Ms. Shakuntala Davendra Singh and their partnership firm i.e., Stark Investments were in the nature of ‘investment advice’ in terms of Regulation 2(1)(l) of the IA Regulations. In terms of Regulation 2(1)(m) of the IA Regulations, ‘investment adviser’ means any person, who for consideration, is engaged in the business of providing investment advice to clients or any person who holds out himself as an investment adviser. Thus, for a person to be identified as an investment adviser, the essential ingredients, which are required to be established are (i) engagement in services of providing ‘investment advice’ (ii) consideration. As discussed above, SEBI after receiving the bank account details from the clients, sought relevant information from the Banks and examined the details. It is noted that in the mandate agreement, reference was made to Axis Bank account of Stark Investments held in Axis Bank. On perusal of the AOF Form and KYC details, it is Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 31 of 44 noted that Mr. Zahin was one of authorised signatory of the bank and was mentioned as a partner in the AOF firm. The descriptions of the transactions from the bank statements were analysed and it was noted that the term ‘ADVISORY’ FEES and CONSULTANCY appeared multiple times. Other than the account held by Stark Investments, the personal accounts of Mr. Zahin and Ms. Surabhi were also analysed and it was noted that terms like ‘fees advisory’, ‘stocks’, ‘consult’, ‘subscri’ ‘equity’, etc. appeared multiple times. Thus, on the basis of the above, it can prima facie be inferred that the investment advice was provided for valid consideration. 29. In view of the foregoing, I prima facie find that the Entities No. 1, 2 and 3 were providing “investment advice” in terms of Regulation 2(1)(l) of IA Regulations, 2013, and were also holding themselves out as an investment adviser, as defined under Regulation 2(1)(m) of the IA Regulations. The Entity No. 3 (Stark Investments) is a partnership firm of Entity No. 2 and 5 (Mr. Zahin Jessani and Ms. Shakuntala). In terms of Regulation 3(1) of the IA Regulations read with Section 12(1) of the SEBI Act, no person shall act as an investment adviser or hold himself out as an investment adviser unless he has obtained a certificate of registration from SEBI. It is noted that none of the Entities viz. Ms. Surabhi Chauhan, Mr. Zahin Jessani, Ms. Shakuntala and Stark Investments had obtained registration from SEBI for carrying out Investment Advisory activities. Therefore, prima facie the violation of Section 12(1) of SEBI Act read with Regulation 3(1) of the IA Regulations are established against the aforesaid Entities No. 1, 2, 3 and 5. Prima facie violation of PMS Regulations: 30. Now I advert to the definition of ‘portfolio manager’ under Regulation 2(1)(o) of the PMS Regulations, which provides that portfolio manager means any body corporate, which pursuant to a contract with a client, advises or directs or undertakes on behalf of the client the management or administration of a portfolio of securities or goods or funds of the client. In the present case, it has been observed that Ms. Surabhi Chauhan, Mr. Zahin Jessani through Stark Investments claimed themselves to be an investment management company providing profit sharing managed account model. The services have been described as full scale Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 32 of 44 equity portfolio management services involving execution of buy and sell transactions in clients’ account with regular quarterly portfolio review. They followed a profit sharing model based on the profits earned by the clients on the investment portfolio. They made various claims through their marketing material including claims of having a proprietary stock picking model based on various fundamental and technical factors. Claims were made that they have a customized advisory process with a sample portfolio performance and their success stories. Suffice it to say, Stark Investments marketed themselves as a portfolio management entity. 31. Stark investments also entered into an ‘investment advisory agreement’ with the clients for the purpose of providing account handling services. Various clauses exhibiting the same have already been discussed in earlier paragraphs. It is relevant to note that as per the agreement, the Entities had obtained the power to direct, manage and change the investment of the assets in the client’s account(s). They obtained discretionary authority to purchase and sell securities and give instructions concerning these transactions to broker-dealer(s) with which client’s account(s) were held. They assumed authority for selection, buying and selling of securities without even obtaining specific consent from the client. Even powers to borrow funds for the purpose of trading on margin were obtained. 32. For the purpose of undertaking the activities mentioned above, they assisted in opening of trading account of the clients and obtained the credentials of the clients through WhatsApp chats as noted above at Para 14. By obtaining the client’s credentials, control of the trading accounts was obtained. It has been observed that a customized profit sharing arrangement was entered by Stark Investments with the clients. As per various agreements, the minimum investment amount required to start the services ranged from ₹15 lakhs onwards with customized profit sharing arrangement. One of the agreements required minimum ₹30 lakhs as the minimum investment amount with profit sharing in the ratio of 85:15. 33. It is also noted that another entity viz. Starkblue Venture LLP was incorporated in February 2022 with Ms. Surabhi Chauhan and Mr. Zahin Jessani as its designated partners. Starkblue Ventures LLP was marketed as an exclusive limited liability Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 33 of 44 partnership claiming to offer high returns with lower volatility. Pursuant to the incorporation of LLP, multiple supplementary agreements and ‘deed(s) of adherence’ were executed with the new clients/investors and they were made partners in the LLP. Through Starkblue Venture LLP, “SQAR” strategy was offered which was marketed as active equity and derivative market non-directional strategy aimed to generate superior and consistent returns. Various features of the SQAR Strategy, its factsheet and various clauses of the LLP agreement have been discussed in earlier paragraphs. As per the LLP agreement, the primary business of Starkblue Venture LLP was to carry on business as advisors of investments in shares, commodities, currencies, debentures, bonds, depository receipts, options, derivatives, government securities, financial instruments, etc. Contribution was solicited from the clients in the name of minimum capital contribution by partners. In the said LLP, Stark Investments (i.e., the partnership firm with Mr. Zahin and Ms. Surabhi as partners) was also named as a partner. It was also mentioned that the profits of LLP for distribution will be arrived after considering all requisite accounting treatments including 25% of profits (Plus GST, wherever applicable) as fixed fees to be paid to Stark Investments as professional fees for management of business of LLP. 34. The monies mobilised through Starkblue Venture LLP were collected in its Bank Account No- 697805600839 maintained with ICICI. The AOF, KYC details and the bank statements of the said account were examined and the following was noted: 34.1. As per the AOF, the account was opened in May 2022 with Mr. Zahin and Ms. Surabhi as the Designated Partners and Authorised Signatory(ies). 34.2. Mostly, the amount collected in the aforesaid account was transferred to the broker of Starkblue Ventures LLP, IIFL Securities Private Limited. A brief summary of the same along with some instances where funds were pooled from investors and subsequently transferred to the Broker are placed below: Table No. 4. Sr. No Date Bank Statement Narration Credit amount(₹) Debit amount(₹) Credit/ Debit by/in favour of 1 27/10/2022 BIL/INFT/000522245960/Inve st/, SUKHDEEP KAUR 1000 - Sukhdeep Kaur Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 34 of 44 2 28/10/2022 BIL/INFT/000522688368/Inve st/, SUKHDEEP KAUR 10,00,000 - Sukhdeep Kaur 3 28/10/2022 RTGSHDFCR520221028558 68740-VIVEK GROVER- 501005600,88060- HDFC0000675 15,00,000 - Vivek Grover 4 29/10/2022 MMT/IMPS/230210306209/T OWARDS INVESTM/ADIL DHIN/Citi Bank 1,000 - Adil Dhingra 5 29/10/2022 BIL/INFT/000523459088/Inve st/, SUKHDEEP KAUR 4,99,000 - Sukhdeep Kaur 6 29/10/2022 RTGS- IDFBR52022102900417343- MR RAVI KANT SINGLA- 10,046072138-IDFB0010201 15,00,000.0 0 - Ravikant Singla 7 31/10/2022 BIL/INFT/000524202501/Che ck/, PRIYANKA TEWARI 100.00 - Priyanka Tewari 8 31/10/2022 BIL/INFT/000524330951/Priy anka/, PRIYANKA TEWARI 5,00,000.00 - Priyanka Tewari 9 31/10/2022 BIL/INFT/000524333283/Priy anka/, PRIYANKA TEWARI 4,00,000.00 - Priyanka Tewari 10 31/10/2022 BIL/INFT/000524335199/Priy anka/, PRIYANKA TEWARI 99,900.00 - Priyanka Tewari 11 31/10/2022 MMT/IMPS/230319137151/Te st/ADITYA KUM/HDFC Bank, 10.00 - Aditya Kumar 12 31/10/2022 BIL/ONL/000524575481/IIFL, IIFL SECURITIES 55,00,000.0 0 IIFL Securities Ltd 34.3. From the table above, it can be illustrated that Starkblue Ventures LLP had mobilised ₹55,01,010 during October 27, 2022–October 31, 2022 from the clients/investors and transferred ₹55,00,000 to IIFL Securities Ltd on October 31, 2022. 34.4. For the period from March 28, 2023 – April 03, 2023, Starkblue Venture LLP collected ₹3,08,47,135 from investors and the amount of ₹3,79,00,000 was transferred to IIFL Securities Ltd on April 03, 2023. 34.5. From January 18, 2024 – January 29, 2024, Starkblue Venture LLP collected ₹1,01,00,000 and the amount of ₹96,50,000 was transferred to IIFL Securities Ltd on January 29, 2024 Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 35 of 44 34.6. From April 30, 2024 – May 15, 2024, ₹1,26,00,200 were collected and the amount of ₹1,25,00,000 was transferred to IIFL Securities Ltd during May 13, 2024 – May 15, 2024 34.7. Thus, the money mobilised by Starkblue Ventures LLP was subsequently transferred to its broker account and was invested in the securities market. 35. The name(s) of the partners/clients/investors appearing in some of the LLP agreement(s) dated March 31, 2023, May 24, 2024 and February 15, 2025 were analysed for credit and debit in the bank account no- 697805600839 for the period from May 13, 2022 to June 30, 2025. The summary of credit transactions is placed in the table below: Table No. 5. Sr. No Name Credit(₹) 1. Tapasya and Geeta Obhrai 2,05,55,100 2. Hiren Joshi 1,05,00,000 3. Swati Jain 83,00,001 4. Priyanka Tiwari 75,00,100 5. Divya Gera 55,00,000 6. Varsha Joshi 50,00,000 7. Bhanu Luthra 50,00,000 8. Eakta 41,00,001 9. Risabh Ladha 35,00,000 10. Ravi Singla 40,00,000 11. Kishore Prabhudas Hemdev 33,34,086 12. Vivek Grover 28,92,446 13. Aditya Singh 25,00,100 14. Simranpal Singh 25,00,001 15. Shinu Saran 25,00,000 16. Margi Krishna Iyer 25,00,000 17. Subramanya K 25,00,000 18. Sonal Khandelwal 25,00,000 19. Epoch Sports and Gaming 25,00,000 20. Rajni katiyar 25,00,000 21. Sukhdeep Kaur 22,00,000 22. Gaurav Goyal 20,00,000 23. Kakarala Jayasri 20,00,000 24. Himani Lohia 20,00,000 25. MJ Finwork LLP 18,81,962 26. KANNEGANTI NARMADA 18,11,150 27. Sheela Satyamurthy 18,11,150 Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 36 of 44 28. Gurubharan Swaminathan 18,00,000 29. Auronevi Pingel 17,00,000 30. Sai Kiran Kothuri 15,00,011 31. Adil Dhingra 15,00,000 32. Anju Gupta 15,00,000 33. Samidhi Sharma 15,00,000 34. Prakash Chand Jain 15,00,000 35. Manoj Watwani 15,00,000 36. Nikhil Sethia 15,00,000 37. Pinky Chopra 15,00,000 38. Nagarajan Ganesan 15,00,000 39. Pawan Mirchardani 15,00,000 40. Neetu Jain 15,00,000 41. Total 13,38,86,108 36. On identification of clients/partners from various Starkblue Ventures LLP agreements, the total amount mobilised has been identified as atleast ₹13,38,86,108. However, on further examination, it is noted that for the said period of May 13, 2022 to June 30, 2025, Starkblue Venture LLP’s account was credited with an amount of ₹ 15,86,31,860.34, possibly because of involvement of other clients/partners. Thus, for the purpose of this Order, an amount of ₹ 15,86,31,860.34 has been taken as the amount mobilised by Starkblue Ventures LLP. 37. In terms of Regulation 2(1)(o) read with Regulation 3(1) of the PMS Regulations, the following conditions are required to be met by any entity desirous of engaging in portfolio management services: (i) Registration from SEBI as PMS (ii) body corporate (iii) advises or directs or undertakes the management or administration of a portfolio of securities or goods or funds of the client pursuant to a contract. It is however noted that the above requirements are for a registered portfolio manager. In case of an unregistered portfolio manager, the essential conditions are (i) the entity promises to carry on PMS or generate returns by investing in securities market on behalf of the investors and (ii) the entity actually makes investment in securities on behalf of clients. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 37 of 44 38. In the instant case, from the material available on record, it is noted that Mr. Zahin and Ms. Surabhi, through Stark Investments, while entering into investment advisory agreement were providing account handling services to its clients. The Whatsapp chats further corroborate the fact that trading details/credentials of the clients were procured and trading decision were taken on their behalf. They had customized advisory plans for their clients with profit sharing model. On the other hand, Starkblue ventures LLP was conceptualized in year 2022 as an exclusive partnership arrangement with Mr. Zahin and Ms. Surabhi as the designated partners, and monies were mobilized from the clients in lieu of offering partnership in the firm. The money mobilized was later transferred to the trading account and investments were made from that money. The clients had no day-to-day control over the affairs of the LLP. Through the LLP agreement, Mr. Zahin and Ms. Surabhi also obtained the custody of the trading accounts of the clients and made investments. 39. It is relevant here to highlight that Entities No. 1 to 5 had not obtained any registration from SEBI. In view of the material discussed above, the essential ingredients of regulation 2(1)(o) are met and prima facie it is established that the Entities No. 1–5 were providing unregistered portfolio Management services in violation of Section 12(1) of SEBI Act read with regulation 3(1) of the PMS Regulations. 40. The total amount mobilized by the Entities through UIA and UPMS is mentioned in the Table below. It is observed that the Entities were simultaneously engaged in the UIA activities as well as UPMS. The operations pertaining to both activities were carried out in an integrated manner under common operational control, with no discernible segregation in terms of management, execution, or fee collection. In view of the intertwined nature of these activities and the absence of any reliable basis to distinctly identify and apportion the fees attributable to each unregistered service, it is not feasible to segregate the amounts collected under the respective heads at this stage. Accordingly, for the purposes of the present proceedings and determination in this Order, the total amount mobilized from both the unregistered activities (during the periods mentioned above at para 23 and 35) has been considered. The particulars are tabulated as under: Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 38 of 44 Table No. 6. Sr. No Bank Account Number Bank Name Held by Credit amount for unregistered services 1 921020009044605 Axis Bank Stark Investments ₹6,22,56,908.95 2 912010031869909 Axis Bank Zahin Jessani ₹1,29,74, 143.77 3 40379331557 SBI Bank Surabhi Chauhan ₹1,11,69,616.82 4 4111140091217 HDFC Bank Surabhi Chauhan ₹57,86,078.27 5. 697805600839 ICICI Bank Stark Ventures LLP ₹15,86,31,860.34 Grand Total ₹25,08,18,608.15 Prima facie violation of PFUTP Regulations: 41. It is already established that prima facie the Entities are involved in providing investment advisory services and portfolio management services without obtaining the necessary registration certificate from SEBI. Based on the material available on record, I note that there has been a common pattern of inducement of clients in the name of investment advice and portfolio management services. Clients were induced to use the services of the Entities on the basis of representations made through various terminologies like use of proprietary quantitative models, algorithm-based trading systems and assured downside protection, etc. Performance of the fund was shared with clients on a quarterly basis showing superior return with respect to other benchmarks. It is also observed that the prospective investors were induced to invest in their offering by portraying unique features of its investment models. Promotional material referred to various technical and fundamental concepts such as Moving Average Convergence Divergence (MACD), risk adjusted Momentums, etc. to enhance the credibility of the proposed investments. The material available on record does not suggest any basis to justify such promotional claims. In one of the Whatspp chats, it is claimed that the maximum downside in investing through them is only 10%. Thus, attempts were made by the Entities to demonstrate a rosy picture of their affairs, which was clearly misleading and was designed to influence the decisions of the investors dealing in its securities. In view of the same, prima facie the violation of Regulations 12A(a), (b) and (c) of the SEBI Act read with Regulation 3(b), (c), (d) and Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 39 of 44 Regulation 4(1), (4(2)(k) and 4(2)(s) of the PFUTP Regulations stands established against the Entities. 42. Thus, to conclude, prima facie, violation of Regulation 3(1) of the IA Regulations, Regulation 3(1) of the PMS Regulations read with Section 12(1) of the SEBI Act and Section 12A(a), (b) and (c) of the SEBI Act read with Regulation 3(b), (c), (d) and Regulation 4(1), 4(2)(k) and 4(2)(s) of the PFUTP Regulations has been established against the Entities. 43. The role and involvement of Entities No. 1, 2, 3 and 4 has been discussed at length in the earlier paragraphs. With regard to Entity No.1, it is additionally noted even though she is not a partner in Stark Investments, she was the one running its affairs. Section 28 of the Partnership Act, 1930 inter alia provides the principle of ‘Holding Out’ which states that ‘anyone who by words spoken or written or by conduct represents himself, or knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in that firm to anyone who has on the faith of any such representation given credit to the firm, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit. In the context of the said provision, it is clear from the mandate agreement(s), investment advisory agreement(s) and the Whatsapp chats and other material available on record that Entity No. 1 held herself out as the partner in Stark Investments. Therefore, she is prima facie liable directly for her role in the alleged UIA activities and UPMS as well as for the affairs of Stark Investments. 44. Further, regarding the role of Entity No. 5, it is noted that although Ms. Shakuntala Devendra Singh (Mother of Ms. Surabhi) was not at the forefront of the operations of Stark Investments, she is one of the working partners in Stark Investments with 50% controlling interest (Mr. Zahin being the other partner) and also the authorized signatory of the bank account. As has been discussed above, the various clauses of the partnership deed bestow substantial roles and responsibilities on both the partners. In terms of the partnership deed, she does not appear to be a nominal or passive partner but has been vested with substantial rights, responsibilities and authority in relation to the management and operations of Stark Investments. The Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 40 of 44 deed envisages her active participation in the conduct of the partnership business, grants her equal remuneration and an equal share in profits and losses, provides unrestricted access to the firm's books of accounts, and authorizes her to operate the partnership's bank accounts either jointly or independently. Collectively, the various clauses prima facie demonstrate that she possessed significant managerial and financial control over the affairs of the partnership and was empowered to participate in its day-to-day operations. Also, in terms of the Partnership Act, 1932, the liabilities of the partners are unlimited and co-extensive as that of the partnership firm unless the circumstances suggest otherwise. In view thereof, Ms. Shakuntala Davendra Singh, is also prima facie responsible for the affairs of the partnership firm, Stark Investments. 45. Accordingly, I find that Issues A and B are answered in the affirmative. I now proceed to address issue C i.e., to determine the requirement and nature of directions, if any, to be issued in the peculiar facts and circumstances of the matter. Need for Interim Directions: 46. Having observed the prima facie violations against the Entities, I note that a detailed investigation/examination to uncover the full extent of the operations of the Entities, total number of their clients/investors and the amount of total fee collected etc., is, at present, in progress. However, pending completion of such investigation/examination, it is necessary to intervene at this stage by way of interim measures to restrain the Entities from dealing in securities and associating with the securities market and to prevent them from, directly or indirectly, offering unregistered investment advisory and portfolio management services. 47. The material available on record indicates that the Entities have been carrying on activities in the nature of investment advisory and portfolio management without obtaining the requisite registration from SEBI as mandated under the Securities laws. The requirement of registration is not a mere procedural formality but a substantive regulatory safeguard intended to ensure that only fit and proper persons, subject to regulatory supervision and compliance obligations, are permitted to deal with investors and their monies. By operating outside the Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 41 of 44 regulatory framework while simultaneously holding themselves out as possessing expertise in securities markets and investment management, the Entities have exposed investors to risks against which the regulatory architecture seeks to provide protection. Such conduct, if permitted to continue unabated, has the potential to undermine investor confidence. 48. The material gathered during the examination further reveals that the Entities have continuously evolved their methods to solicit clients and mobilise funds. The activities which were started as Investment advisory and account handling through Stark Investments were modified into a more sophisticated strategy by adopting a LLP structure through Starkblue Ventures LLP. Thus, prima facie, the Entities have modified their modus operandi, marketing strategies, legal persona and operational structures, thereby enabling them to perpetuate their activities while reducing the likelihood of detection. The promotional and marketing content disseminated by the Entities appears designed to create an impression of legitimacy, expertise and assured financial success. Such representations are capable of inducing retail investors, many of whom may lack the requisite financial literacy, awareness or market sophistication, to entrust their savings to the Entities. The securities market increasingly attracts first-time and inexperienced investors who are particularly vulnerable to claims of superior returns, exclusive trading strategies and purported market expertise. In such circumstances, intervention of SEBI becomes imperative not merely to protect existing investors but also to prevent further inducement of unsuspecting members of the public. 49. The examination so far has prima facie revealed that an amount of at least ₹25,08,18,608.15 has been mobilised from investors. The material on record indicates a depletion of investor monies, giving rise to a reasonable apprehension that the remaining funds may also be dissipated, diverted, layered or otherwise rendered unavailable. 50. Also, I place reliance on the order of the Hon’ble Securities Appellate Tribunal, passed in the case of Amalendu Mukherjee Vs. SEBI1, wherein the Hon’ble 1 [Appeal (L) no. 169 of 2020] Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 42 of 44 Tribunal has underscored the necessity of passing impounding orders by inter-alia observing the following: “We are of the opinion that the WTM is empowered under the SEBI Act and the Regulations to pass an ex-parte order in order to protect the interests of securities market and the investors. If such impounding order is not passed, it may result in defeating the ultimate direction of disgorgement if any, as there would be chances of such monies being dissipated by the appellant...” 51. Thus, based on above reasons, Interim directions are warranted in the case and I proceed accordingly. Directions: 52. In light of the foregoing discussion, I, in exercise of the powers conferred upon me under Sections 11, 11 (4), 11B (1) and 11D read with Section 19 of the SEBI Act, 1992, hereby issue the following interim directions: 52.1. The Entities are restrained from buying, selling or dealing in securities or associating themselves with the securities market, either directly or indirectly, in any manner whatsoever until further orders. 52.2. If the Entities have any open position in any exchange traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. The Entities are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order. 52.3. Banks are directed that no debits shall be made, without permission of SEBI, in respect of the bank accounts held jointly or severally by the Entities. Further, the Depositories are directed that no debit shall be made, without permission of SEBI, in respect of the demat accounts held by the aforesaid Entities held jointly or severally by them. However, credits, if any, into the accounts may be allowed. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 43 of 44 52.4. Banks and the Depositories are directed to ensure that all the aforesaid directions are strictly enforced. 52.5. The Registrar and Transfer Agents are directed to ensure that without permission of SEBI, they neither permit any transfer nor redemption of the securities, including Mutual Funds units, held by the Entities. 52.6. The Entities are further directed to provide a full inventory of all their assets whether movable or immovable, or any interest or investment or charge in/on any of such assets, including property, details of all their bank accounts, demat accounts, holdings of shares/securities, if held in physical form and mutual fund investments and details of companies in which they hold substantial or controlling interest, immediately but not later than 7 working days of this order. 52.7. The Entities are directed not to dispose of or alienate any of their assets/properties, except with the prior permission of SEBI. 52.8. The Entities shall cease and desist from, directly or indirectly, offering unregistered investment advisory and portfolio management services and from acting as or holding themselves out as investment advisors or portfolio managers. They shall cease to solicit or undertake such activity or any other unregistered activity in the securities market, directly or indirectly, in any manner whatsoever. 53. This Order shall come into force with immediate effect and shall remain in force till further Orders. 54. The prima facie observations contained in this Interim Order are made on the basis of the material available on record. The Noticees may, within 21 days from the date of receipt of this Order, file their reply/objections, if any, to this Order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard. Ex Parte Interim Order in the matter of Unregistered Investment Advisory and Unregistered Portfolio Management Services activities by Stark Investments and Ors. Page 44 of 44 55. This order is without prejudice to any other action that SEBI may initiate under the securities laws, as deemed appropriate, against the above mentioned Entities. 56. A copy of this order shall be forwarded to the Stock Exchanges, Depositories, Registrar and Share Transfer Agents and Banks to ensure necessary compliance. Place: Mumbai AMARJEET SINGH WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA AMARJEET SINGH Digitally signed by AMARJEET SINGH Date: 2026.07.24 14:50:59 +05'30'