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SEBI bars Bombay Dyeing, Ness Wadia from securities marketplace for as much as 2 years; 16 crore superb – Enterprise Colors

SEBI has banned Bombay Dyeing and Manufacturing Firm Restricted and 10 entities together with its promoters – Nusli N Wadia, Ness Wadia and Jehangir Wadia from securities markets for 2 years and imposed a complete superb of Rs 15.75 crore on them. Concerned in a fraudulent scheme to misrepresent the corporate’s monetary statements.

Others banned and penalized by SEBI are Scale Providers Ltd, a Wadia group firm, its then director DS Gagrat, NH Dattanwala Shailesh Karnik, R Chandrasekaran, and Durgesh Mehta, who was the joint managing director and chief monetary officer of Bombay Dyeing.

The Securities and Trade Board of India (SEBI) in its order handed on Friday stated that they’ve been directed to pay the superb inside 45 days.

Based mostly on sure complaints, SEBI carried out an in depth examination of the affairs of Bombay Dyeing and Manufacturing Firm Restricted (BDMCL) for the interval from FY 2011-12 to FY 2018-19.

SEBI, in its investigation, discovered that these entities dedicated a fraud of misrepresenting the monetary statements of BDMCL by inflating the sale of Rs 2,492.94 crore and revenue of Rs 1,302.20 crore arising from the alleged sale of flats (by means of Memorandum of Understanding or MoU). was concerned within the plan. ) Scale up by BDMCL throughout the monetary 12 months 2011-12 to 2017-18.

The regulator famous that the shareholding construction of SCALE was intentionally designed in such a manner that though BDMCL instantly held solely 19 per cent stake, by means of its oblique holdings in different SCALE shareholders, BDMCL would maintain your entire share capital of the corporate. was capable of have full management over it. Scale.

BDMCL’s direct stake in Scale was intentionally stored at 19 per cent by design to make sure that the definition of ‘Affiliate Firm’ is just not attracted and, subsequently, it might not be mandated to consolidate the monetary statements of Scale with BDMCL .

“If the monetary statements of SCALE had been consolidated with BDMCL, the aforesaid gross sales and revenue of BDMCL from the transaction with SCALE wouldn’t have been mirrored within the consolidated monetary statements of BDMCL, because the mutual transactions between the 2 entities had been terminated. would have been reported within the consolidated monetary statements,” SEBI stated in its 100-page order.

Additional, BDMCL didn’t disclose all bodily transactions with its “associated get together” scale within the quarterly company governance compliance report.

Accordingly, SEBI has banned Bombay Dyeing, Nusli N Wadia, their sons – Ness and Jahangir – and Mehta from the securities markets for 2 years, whereas one 12 months for Scale and its then administrators.

Additional, SEBI has barred Wadia and Mehta from being related to securities market together with administrators or key managerial personnel in a listed firm for a interval of 1 12 months.

It stated that Wadia has performed an energetic and willfully passive function in finishing up the plan to intentionally misrepresent the monetary statements of BDMCL.

“So as to keep away from the consolidation of Scale’s monetary statements, it’s deliberate to cut back the shareholding in Scale to 19 %, the execution of a non-actual sale to Scale, by means of a Memorandum of Understanding, to Scale (and no different wholesale consumers)”. Grant of deferment of fee, inflation of gross sales and revenue of BDMCL, non-recovery of fee from scale and many others., totally different phases of a complete ‘Scheme of Fraud’ underneath the supervision and management of Discover No. 3, 4 and 5, (Wadias) He was the top of affairs in BDMCL when he was in workplace,” Sebi stated.

Total, the regulator slapped Rs 2.25 crore on Bombay Dyeing, Rs 4 crore on Nusli Wadia, Rs 5 crore on Jehangir Wadia, Rs 2 crore on Ness Wadia, Rs 50 lakh on Mehta, Rs 1 crore on Scale and Rs 25. . lakhs every on the then administrators of Schell.

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