Motilal Oswal Under Fire
• Investors Cry Foul Over Alleged Mismanagement
• Sprouts News SIT Exposes Investor Grievances
Motilal Oswal Financial Services (MOFSL) is facing serious allegations of misleading investors and poor fund management. The Sprouts News Special Investigation Team has uncovered a troubling case where an investor, Udayan V Shah, suffered significant losses after being persuaded to invest ₹1 crore in the Motilal Oswal Focused Multicap Opportunities Fund (Category III AIF).
MOFSL representatives assured Shah that the fund was personally overseen by Ramdeo Agarwal and showed impressive past returns. However, after subscribing, Shah found the stock selections questionable. His concerns were repeatedly ignored, and the NAV of the fund dropped to ₹66 lakhs at one point. After multiple requests for portfolio adjustments were dismissed, MOFSL finally reshuffled the portfolio—too late to prevent a substantial financial setback. When Shah exited the fund after three years, he received ₹96.78 lakhs, incurring a major loss. He also paid additional charges, including a setup fee and GST, resulting in a total loss of ₹17 lakhs.
• History of Allegations: Not the First Time for MOFSL
This is not the first time MOFSL has faced controversy. The firm was previously implicated in the National Spot Exchange Limited (NSEL) scam, where brokers were accused of mis-selling contracts and manipulating client accounts. In 2019, SEBI declared Motilal Oswal Commodities Broker “not fit and proper” for trading in commodity derivatives. These repeated accusations suggest a pattern of financial malpractice that demands stricter regulatory intervention.
• Sprouts News Special Investigation Team Calls for Accountability
Despite Shah’s repeated appeals to MOFSL management, including Vice President Rishi Bobra, his grievances were ignored. He has now called for MOFSL to reimburse his losses, emphasizing that the firm must take responsibility for its actions. The Sprouts News Special Investigation Team urges SEBI and financial regulators to take immediate action against such practices to protect investors from similar exploitation.
This case raises serious concerns about investor protection in India. Will regulators step in to prevent further financial mismanagement, or will more investors fall victim to questionable investment strategies?
Also Read: Multi-Crore Realty Scam in Ambernath.
1. NSEL Scam and SEBI’s “Not Fit and Proper” Order (2019)
Motilal Oswal was among the brokers accused in the National Spot Exchange Limited (NSEL) scam, a ₹5,600 crore fraud that surfaced in 2013. SEBI found that several brokers, including Motilal Oswal Commodities Broker, engaged in mis-selling, client code modifications, and KYC manipulation. In 2019, SEBI declared Motilal Oswal and other brokers “not fit and proper” to operate in the commodities segment.
2. Allegations of Mis-Selling and High-Risk Products
Multiple investors have accused Motilal Oswal of aggressively marketing high-risk investment products without proper risk assessment. Cases similar to the one exposed by Sprouts News Special Investigation Team have been reported, where clients were allegedly misled into subscribing to Alternative Investment Funds (AIFs) and structured products that didn’t align with their risk profiles.
3. Client Grievances Over Poor Portfolio Management
Several investors have filed complaints against Motilal Oswal for poor stock selection and portfolio mismanagement, leading to heavy financial losses. Many claimed that despite repeated warnings about underperforming investments, the company failed to act in time, resulting in erosion of capital.
4. Insider Trading Allegations
There have been speculations regarding insider trading and preferential stock recommendations, where certain investors were allegedly given early access to crucial market information. While no formal conviction has been made, regulatory bodies have reportedly investigated such concerns in the past.
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