Sebi restricted Bombay Dyeing and Manufacturing Company Limited along with 10 other entities for playing a sharp mind game with the security market on Saturday. The company along with Nusli N Wadia, Ness Wadia, and Jehangir Wadia who are its supporters were entangled in a deceitful case of misrepresentation of the company’s monetary declarations. The whole group is kept out of the stock exchange for 24 months together with damages of Rs.15.75 crores.
The 10 members involved in the case are Scal Services Ltd which is a 38 years old company, Wadia Group company. The directors; are D S Gagrat, N H Datanwala Shailesh Karnik, and the joint managing director together with the chief financial officer; R Chandrasekharan, and Durgesh Mehta.
According to a statement posted by Sebi, the companies are told to settle with the detriment within a time of 45 days.
In a 100-page long report, Sebi stated that there was a deceitful misrepresentation of financial proclamations issued by Bombay Dyeing starting from 2011-12 to 2018-2019. A thorough inquiry was made which found that the above mentioned entities falsified the company’s sales in their financial statements.
The matter started in June 2011 when a notice was issued by the market. The company, Bombay dyeing was involved with Scal services who is engrossed in the real estate business. During the loss years of Bombay dyeing, it fraudulently sold the estate to Scal services and claimed profit in the financial statements. The entire structure was planned out to hide the shareholding of Bombay Dyeing. Thus, committing a faulty act.
The investigation also found that the real earnings of the company were coming from the deals made to Scal services and not from its actual business of fabric.
The Securities and Exchange Board of India (SEBI) is under the Ministry of Finance, founded as a statutory in the year 1992 which has wide ranging regulatory, investigative, and enforcement authorities, including the power to levy penalties on violators. Through securities and exchange boards of the Indian Act,1992 it received statutory powers on 30th January 1992. Its headquarter is in Mumbai, Maharashtra.
SEBI has been granted some powers for the release of its roles like it can examine the books of accounts and call for periodical returns from well-known securities trades, and it can compel some companies to index their stakes in one or more securities exchanges if found necessary.
