Image Credits - Outlook Business
Advocate Ajay Kumar Chaddha has faced scrutiny from the Securities and Exchange Board of India (SEBI) regarding discrepancies in his reported earnings. On August 7, SEBI issued an order highlighting inconsistencies in Chaddha’s claims about his income from legal work versus advisory services.
Chaddha had asserted that over ₹21.93 lakh of his bank balance came from his legal practice, with only ₹3.11 lakh attributed to advisory services. However, Sebi’s investigation revealed that Chaddha was a student during the period he claimed to have earned substantial legal fees. The regulator also discovered that Chaddha operated an unregistered advisory service through a Telegram group with around 35,000 members, contradicting his reported advisory income.
The investigation found the actual balance in Chaddha’s bank account exceeded ₹41.72 lakh, raising doubts about the legitimacy of his claims. SEBI has demanded that Chaddha provide detailed information about 3,241 credit transactions in the account, certified by an independent Chartered Accountant.
In its order, SEBI noted violations of several regulations and directed Chaddha to issue a public notice inviting refund requests from individuals who used his unregistered advisory services. Chaddha has been fined ₹6 lakh. Those seeking refunds have three months to submit claims, with Chaddha required to process these requests within four months. Any remaining funds must be deposited in an escrow account and eventually transferred to the Investors Protection and Education Fund.
The case against Chaddha emerged from a complaint about his unregistered advisory services, which included charges of ₹950 per month for intraday trading calls and operated through WhatsApp and Telegram groups.