ASIC gives detail on Kalkine investigation as regulator warns of focus on anti-hawking, financial advice breaches

ASIC has revealed it has expanded its investigation into financial tips platform Kalkine, warning it was examining whether the Australian company has provided unlicensed advice.

Kalkine CEO Kunal Sawhney, centre, with Kalkine staff in India in 2020.

The corporate regulator has revealed it has expanded its investigation into financial tips platform Kalkine, saying it was examining whether the company has provided unlicensed financial advice.

In a response to a Senate inquiry, the Australian Securities & Investments Commission said it had not reached any conclusions but had finished many of its interviews of customers who lodged complaints against the company.

As revealed in The Australian, Kalkine – which has offices in Australia, Canada, New Zealand, the United Kingdom and India – encouraged customers with high-pressure sales tactics to churn share portfolios.

This publication revealed Kalkine’s agents, operating out of the company’s offices in New Delhi, repeatedly encouraged customers to buy and sell specific shares, and pushed them to sign on to expensive years-long newsletter subscriptions.

ASIC told the Senate inquiry, in a response filed late last year, it had received several reports about Kalkine, with complainants raising concerns over the company providing personal ­financial advice outside the bounds of its licence.

Kalkine is only licensed to provide financial advice of a general nature.

ASIC also told the Senate complainants were concerned about Kalkine’s “poor service or no service, breaches of the anti-hawking provisions, problems with Kalkine’s complaints handling processes, training and competency of overseas-based staff and misleading conduct”.

Hawking prohibitions were introduced in September 2021, barring companies from seeking to sell financial products from an unsolicited contact.

ASIC said it had interviewed multiple investors who had used Kalkine’s services, as well as reviewing call transcripts.

Kalkine CEO Kunal Sawhney.

In one call reviewed by this publication, Kalkine sales agent “Gabriel” urged a 90-year-old man to sell $100,000 of his $900,000 portfolio to invest in “better stocks”.

“I’m going to give you a different subscription for health and the dividend-only dividend because that suits you, that has a better potential,” he told the man.

ASIC told the Senate it had also expanded its investigation into Kalkine to capture other companies under the control of the company’s chief executive, Kunal Sawhney.

Mr Sawhney, who did not respond to attempts to contact him, established SivaStatz in the wake of reporting about Kalkine in this publication.

SivaStatz, also known as Sivadata, spruiked broker recommendations on Australian-listed equities to customers but assured customers “no advice or recommendations on investments or trading are made nor implied on this website”.

A Kalkine spokesman, at the time, defended Kalkine’s business practices, noting “in any jurisdiction in which it operates (it was) compliant with all local laws and regulations”.

“SivaStatz is a general information website and Sivadata does not hold an AFS licence,” ASIC noted.

“ASIC is investigating whether Sivadata and Kalkine Media are nevertheless providing financial product advice to clients.”

Kalkine has previously faced regulatory action over its sales tactics, with the company receiving a ban on making calls in New Zealand after the Financial Markets Authority found “concerning” behaviour from its staff.

The FMA said Kalkine was “likely to mislead prospective clients generally in relation to Kalkine’s advice service” and its “primary place of operations”.

Kalkine also faced a probe by the Ontario Securities Commission over its actions in Canada.