Famous Finance Influencer PR Sundar fined and Barred from Trading for having 2 two DINs

Individuals advising on financial problems, particularly investing and the stock market, have grown in popularity over the last five years, as dozens of finfluencers (financial influencers) have proliferated throughout social media platforms. Some opt to ignore them, while others choose to listen to them and a few accept their advice verbatim, but they seldom verify whether they have the appropriate credentials or Sebi accreditation to advise individuals on financial concerns.

In a first, Sebi barred a well-known YouTube finfluencer, PR Sundar, from trading for a year and ordered them to pay settlement and disgorgement amounts following his alleged involvement in violations of investment advisor regulations.

Recently, apart from this, PR Sundar may find himself in trouble again. It has learnt that he and Mangaiyarkarasi Sundar, co-promoter of Mansun Consultancy, have two Director Identification Numbers (DINs).

When the media contacted him for clarification, he stated that the DINs obtained previously will be surrendered on June 1.

A person may not have more than one DIN. According to Section 155 of the Companies Act 2013, no person who has previously been assigned a DIN may apply for, obtain, or hold another DIN.

According to records, PR Sundar has the DINs 02987345 and 07848296, whereas Mangaiyarkarasi Sundar has the DINs 02987314 and 07848221.

While 02987345 and 02987314 connect the two to a firm called Sunman Consultancy Limited, 07848296 and 07848221 connect the two to a company called Mansun Consultancy.

The directors’ names have been spelt somewhat differently for both, as have the contact addresses. Sunman’s directors are Mangaiyarkarasi Sundar and Purisai- Rajamani Sundar, and the contact address is Flat 8D, Block 4, Shanthi Towers, Old No 88, New No 4, Arcot Road, Vadapalani, Chennai 6000026. The directors’ names for Mansun have been spelled without spaces as Mangaiyarkarasisundar and Purisairajamanisundar, and the contact address has been supplied as 113-134, Anna Salai, Raheja Towers, 411- fourth floor, Chennai, Tamil Nadu – 600002.

The only thing the two had in common was an email address: [email protected].

Sunman, which was founded in 2010 and has the company identification number U67190TN2010PTC075195, is no longer in business. Mansun Consultancy, along with its proprietors, was recently barred from the securities market for providing investment advice services without legal registration.

Sundar stated that he had no knowledge his name had two DINs associated to it. He stated that he had them registered via two different agencies due to the amount of paperwork involved, and hence was unaware of the two existing independently.

He stated that now that he has been told, he would surrender the first on June 1, as directed by his auditor.

According to Pramod SM, a lawyer and company secretary with decades of expertise, it is exceedingly improbable that a person is unaware that he or she has two DINs in their name.

“Regular updates are sent to people via their contact phone numbers or email IDs,” Pramod explained.

Sunman and Mansun share the same email address, [email protected]. As a result, updates for both DINs should have arrived at the same email address.

Pramod stated that just because a DIN is dormant, as one of Sundar’s is, does not mean it has ceased to exist. He claims that an inactive DIN may be activated in a single day by filling out a paperwork and paying Rs 5,000.

What was the case?

The Securities and Exchange Board of India (SEBI) acted after receiving two references stating that Sundar, through his firm, Mansun Consulting, was offering consulting services without acquiring the necessary Sebi registration.

According to a Sebi letter, Sundar was running a website named www.prsundar.blogspot.com where he offered several packages for giving advisory services. The fees collected in lieu of services were received using a payment gateway linked to Applicant no. 1, Mansun Consultancy Pvt. Ltd. (hereafter referred to as ‘Mansun/company’)’s ICICI Bank Ltd. account. Mansun was founded on June 30, 2017. Applicant No. 2, Mr. P R Sundar, and Applicant No. 3, Ms. Mangayarkarasi Sundar, are the company’s promoter directors, each owning a 50% stake.

Sebi issued a show cause notice on May 17, 2022, and a Supplementary Show Cause Notice on November 8, 2022, alleging that the website had a tab titled ‘Advisory,’ and that in the account opening forms and KYC documents forwarded by ICICI Bank and Razorpay, the type of business mentioned is “share marketing consultancy.”

In response to an enquiry, Mansun presented a list of suggestions offered by them for the month of January 2021 by email dated March 17, 2022.

Sebi discovered that a suggestion was connected to purchasing/selling/dealing in securities, which were transmitted to clients.

As a result, it was claimed that Mansun’s suggestions came under the definition of ‘investment advise’ as defined in Reg. 2 (1) (l) of the SEBI (Investment Advisers) Regulations, 2013.

Furthermore, it was alleged that the Applicants participated in the activities of a ‘investment adviser’ as defined under rule 2 (m) of the IA Regulations.

Following the discovery of their breach, Mansun agreed to pay a revised settlement payment of Rs. 15,60,000/-each, for a total of Rs. 46,80,000/- to SEBI, as well as a disgorgement amount of Rs. 6,07,69,863/, with interest at 12% per year from June 1, 2020, till the date of submission of the RST.