The regulator has levied a fine totalling Rs 47 lakh on 16 entries
Sebi on Tuesday barred real estate firm Omaxe, its chairman Rohtas Goel, managing director Mohit Goel and three others from the securities market for two years for irregularities in the company's financial statements.
The others restrained from the securities markets are -- Sudhangshu S. Biswal, Arun Kumar Pandey and Vimal Gupta.
Additionally, these five persons have been "prohibited from holding any position as Director or Key Managerial Person of any other listed company for two years".
Apart from these, the regulator has levied a fine totalling Rs 47 lakh on 16 entries, including these six entities. The penalties range from Rs 1 lakh to Rs 7 lakh need to be paid within 45 days.
In its 126-page final order, Sebi said these entities have "acted in concert to execute a fraudulent scheme which they tried to portray as normal transactions for the benefit of the company although it was experiencing loss, while also trying to portray that these as merely lending activities, thereby trying to maintain the price of the scrip of Omaxe for three years''.
The company misrepresented the financial statements during 2018-19, 2019-20 and 2020-21 through its various items -- revenue, debtors, advances, and expenses.
"By the act of large-scale misrepresentation/misstatement/manipulation in financial statements by Omaxe, the scrip price was directly or indirectly manipulated to maintain the value of the collateral kept by the promoter against the loan," Sebi noted.
Furthermore, the fraud was never disclosed to the shareholders of Omaxe, which misled them to remain invested in its shares or deal in its securities. Also, misrepresentation of the books and accounts of Omaxe misled the investors in the securities market, it added.
Accordingly, Sebi has barred six entities including Omaxe, Rohtas Goel, Mohit Goe and three others from "accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for two years".
The order came after the Securities and Exchange Board of India (Sebi) received a complaint against Omaxe alleging that the company conducted fraudulent transactions, diverted/siphoned funds, misrepresented the financial statements, and inflated turnover among others.
As these allegations were serious, the matter was taken up for further examination by Sebi including conducting a forensic audit into the affairs of Omaxe. The investigation period in the matter was taken from April 1, 2018, to March 31, 2021, which includes FY 2018-19, 2019-20 and 2020-21.
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