The Securities and Exchange Board of India has banned real estate company Omakse, its chairman Lotus Goel, director Mohit Goel and three others from trading in the stock exchange for two years for alleged irregularities in the company’s financial statements.
The individuals in question will be “prohibited from accessing the securities market and from directly or indirectly buying or selling securities or otherwise dealing in securities or in any way being involved in the securities market for a period of two years,” the announcement said.
Others barred from the securities market are Sudhangsh S Biswal, Arun Kumar Pandey and Vimal Gupta.
Additionally, the five were “banned from holding director or key management positions in any other publicly listed company for the next two years.”
The regulator has imposed a total penalty of Rs 4.7 million on 16 companies, including the six mentioned above. The fines range from Rs 100,000 to Rs 700,000 and have to be paid within 45 days.
In its 126-page final order, SEBI said the entities “conspired to execute a fraudulent scheme to present the transactions as normal trading in the interest of the company despite the company incurring losses and to present the same as mere lending activities, thereby attempting to maintain the price of Omaxe shares for a period of three years.”
The market regulator alleged that the company had misrepresented its financial statements for FY19, FY20 and FY21 through various items including revenue, debtors, advances and expenses.
“The acts of massive misrepresentation/misstatement/manipulation of financial statements by Omaxe have resulted in direct or indirect manipulation of securities prices to maintain the value of collateral held by the loan promoters,” SEBI said.
The fraudulent conduct was never disclosed to Omaxx’s shareholders, misleading them into continuing to invest in and trade in Omaxx’s shares, and false statements in Omaxx’s books and accounts also misled investors in the securities market, the company said.
The order came after SEBI received allegations against Omaxe that the company had engaged in fraudulent transactions, misappropriated and diverted funds, falsified financial statements and inflated turnover.
Given the serious nature of these allegations, SEBI conducted further investigations, including a forensic audit of Omakse’s operations. The period of investigation in the matter was from April 1, 2018 to March 31, 2021.
(With inputs from PTI)
