SEBI levies Rs 84 lakh fine on Dalmia Industrial Development, 5 others

New Delhi: Capital markets regulator Sebi on Thursday imposed a penalty totalling Rs 84 lakh on six entities, including Dalmia Industrial Development Ltd (DIDL), in a case related to misrepresentation in the company's financials.

In addition, the Securities and Exchange Board of India (Sebi) has barred the entities from the capital markets for up to one year.

In its 51-page order, the regulator found that DIDL has disclosed false transactions in its books of accounts. There was discrepancy in the figure relating to loans and advances; besides, there was discrepancy between trade receivable and revenue for 2015-16 to 2017-18.

In addition, the firm failed to represent a true and fair view of the state of affairs of the company and further, it made suspicious investments in companies having nil revenue and assets and had not disclosed the true nature of these investments in its financials, Sebi said.

Apart from these, the company failed to furnish information sought by the forensic auditor.

Sebi noted that Vikash Chowdhary, Raj Mohta, Vineet Chowdhary, Alok Agarwal and Shailendra Nath Bakshi, who were the directors/ CFO of the company at the relevant time, including independent directors are also liable for the violations committed by DIDL.

Through such acts, these entities have violated LODR (Listing Obligations and Disclosure Requirements) rules.

Individually, Sebi levied a fine of Rs 40 lakh on DIDL, Rs 15 lakh on Vineet Chowdhary, Rs 10 lakh on Vikash Chowdhary, Rs 11 lakh on Agarwal, Rs 5 lakh on Mohta and Rs 3 lakh on Bakshi.

Also, Sebi has prohibited five entities from the securities markets for a period of one year, while the same for Bakshi is six months.

The order comes after Sebi carried out an investigation in the matter after receiving a forensic audit report (FAR) in July 2019.

The independent forensic auditor was appointed by BSE after Sebi, through an interim order in September 2017, directed the stock exchange to appoint the same for verifying misrepresentation including of financials and/or business of DIDL, if any and misuse of the funds/books of accounts of DIDL, if any. These directions were confirmed by Sebi in October 2018.

DIDL was in the list of 331 suspected shell companies that came from the corporate affairs ministry in June 2017 following which Sebi imposed trading curbs in the succeeding month of August.