The Securities and Exchange Board of India (SEBI) has imposed restrictions on the real estate company Omaxe, its Chairman Rohtas Goel, Managing Director Mohit Goel, and three others, excluding them from accessing the securities market for two years. This action followed a complaint alleging Omaxe's involvement in fraudulent transactions, fund diversion, misrepresentation of financial statements, and inflation of turnover. SEBI conducted a forensic audit covering the period from 2018-19 to 2020-21 and found that Omaxe had misrepresented its financial statements to manipulate its share price and maintain the value of the promoters' collateral against a loan. The regulator has also imposed a fine of INR 47 lakh on 16 entities, including Omaxe and its key personnel.
Shares of the real estate firm Omaxe have been consistently falling following the restrictions imposed by the Securities and Exchange Board of India (SEBI) on the company, its Chairman Rohtas Goel, Managing Director Mohit Goel, and three others. SEBI barred these individuals from accessing the securities market for two years due to misrepresentation in the company's financial statements.
SEBI's 126-page final order also restrained three other individuals-Sudhangshu S Biswal, Arun Kumar Pandey, and Vimal Gupta-from the securities market for two years. Additionally, these five persons are prohibited from holding any position as a Director or Key Managerial Person in any other listed company for the same period. Omaxe stated that it will consider challenging SEBI's order, which it has not yet received.
The company spokesperson said that the issues appear to be related to accounting interpretations, which were explained through documentation, market practices, and case laws. Omaxe will file its response to the stock exchanges within the stipulated time frame once it receives the order.
The regulator has also imposed a fine of INR 47 lakh on 16 entities, including Omaxe, Rohtas Goel, Mohit Goel, and three others. SEBI found that these entities acted in concert to execute a fraudulent scheme, misrepresenting the company's financial statements during the period from 2018-19 to 2020-21 to maintain the price of Omaxe's shares.
The order came after SEBI received a complaint against Omaxe alleging that the company had conducted fraudulent transactions, diverted or siphoned funds, misrepresented its financial statements, and inflated its turnover, among other serious allegations. As a result, SEBI undertook a further examination of the matter, including a forensic audit of Omaxe's affairs, with the investigation period covering the three financial years from 1 April 2018 to 31 March 2021.
The investigation revealed that Omaxe misrepresented its financial statements, including revenue, debtors, advances, and expenses, leading to the manipulation of its share price to maintain the value of the promoter's collateral against a loan. SEBI concluded that this fraud was never disclosed to Omaxe's shareholders, misleading them to remain invested in the company's shares.
The SEBI order has sent shockwaves through the market. This crackdown serves as a stark reminder of the importance of transparency and accountability in the securities market, and the consequences that can arise when companies and their leadership engage in fraudulent practices.
Advertisement
Facebook
Whatsapp
