SEBI prohibits Omaxe and its Chairman from Securities Market for 2 years

The Securities and Exchange Board of India (Sebi) has taken action against several entities involved in fraudulent activities in the securities market. The individuals restrained from the securities markets are Sudhangshu S. Biswal, Arun Kumar Pandey, and Vimal Gupta. Additionally, five persons, including the mentioned individuals, have been prohibited from holding any position as Director or Key Managerial Person of any other listed company for two years. Sebi has imposed a fine totaling Rs 47 lakh on 16 entities, with penalties ranging from Rs 1 lakh to Rs 7 lakh that need to be paid within 45 days.

In its 126-page final order, Sebi stated that the entities acted in concert to execute a fraudulent scheme, which they tried to portray as normal transactions for the benefit of the company. The regulator found that the company misrepresented its financial statements during 2018-19, 2019-20, and 2020-21. Omaxe, the company in question, engaged in large-scale misrepresentation, manipulation of financial statements, and collateral value maintenance through direct or indirect manipulation of the scrip price. Sebi further noted that the fraud by Omaxe was not disclosed to its shareholders, misleading them into remaining invested in its shares or dealing in its securities.

The misrepresentation of the books and accounts of Omaxe also misled investors in the securities market. Consequently, Sebi has barred six entities, including Omaxe and several individuals, from accessing the securities market for two years. The order came after Sebi received a complaint against Omaxe, alleging fraudulent transactions, fund diversion, misrepresentation of financial statements, and turnover inflation. Sebi initiated a forensic audit into the affairs of Omaxe for the period from April 1, 2018, to March 31, 2021, based on the serious nature of the allegations.