India’s securities regulator has imposed a seven-year ban on Debock Industries and its managing director, Mukesh Singh, after uncovering a wide-ranging accounting scheme that misled investors and facilitated their migration to the main market, triggering significant penalties and disgorgement orders.
India’s markets regulator has barred Debock Industries and its managing director, Mukesh Singh, from the securities market for seven years after finding what it described as a wide-ranging accounting fraud that helped the company move from the SME platform to the National Stock Exchange’s main board. In a final order issued on Friday, the Securities and Exchange Board of India said the company inflated its finances through fictitious sales and purchases, circular transactions and false entries.
SEBI said the alleged scheme allowed Debock to present a healthier balance sheet than it really had, supporting a migration to the main board in 2022 and later underpinning preferential allotments, bonus shares and a rights issue. According to the regulator, forged bank statements were used to disguise the sham transactions, while the company’s accounts for FY 2021-22, FY 2022-23 and FY 2023-24 were misstated.
The regulator ordered disgorgement of unlawful gains totalling ₹59.30 crore and directed Debock to restore ₹49 crore it said had been diverted from its 2023 rights issue, plus 12% annual interest from July 24, 2023. SEBI also imposed penalties of more than ₹29 crore across the company, Singh and others, with Singh’s personal fine set at ₹20.10 crore. Other bans ranged from three to five years.
According to the order, the money raised through the rights issue was routed to people and entities linked to the promoters, while some of the alleged gains were traced to Singh, Sunil Kalot, Priyanka Sharma and Gaurav Jain. Kalot was barred for five years, while Sharma and Jain were each barred for three years. SEBI also restrained Singh from holding key positions in listed companies or registered market intermediaries, underscoring the regulator’s growing scrutiny of smaller listed firms and their use of the public markets.
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