sebi: Four individuals settle with Sebi case related to Sobha Ltd; pay Rs 2.93 crore settlement amount

New Delhi, Markets regulator Sebi has disposed of the adjudication proceedings against realty firm and four individuals following settlement in a case pertaining to alleged fraudulent trading and disclosure lapses. A settlement amount of Rs 2,92,50,000 has been paid by the four individuals.

Among others, it was alleged that Sobha Ltd had misrepresented the receivables for the construction of residence of one D K Shivakumar (DKS) and misreported service tax/GST dues of the individual in three financial years — 2016-17, 2017-18 and 2018-19.

There was also the allegation about non-disclosure of change in accounting policy for the same during the said period, according to a settlement order passed by Sebi on Monday.

Apart from Sobha Ltd, the proceedings were initiated against the company’s Chairman and Executive Director Ravi Puthan Naduvakkat Chentha Maraksha Menon (noticee 2) and three others — Jagdish Chandra Sharma (noticee 3), Ramakrishnan Prabhakaran (noticee 4) and Subhash Mohan Bhat (noticee 5).

As per the order, Jagdish Chandra Sharma was the Managing Director and Executive Director, Ramakrishnan Prabhakaran was the Deputy Managing Director and Executive Director and Subhash Mohan Bhat was the Chief Financial Officer at the given period.

Following the settlement, the adjudication proceedings initiated against the entities in September 2021 have been disposed of by the regulator, according to the order issued on Monday.

“The noticees complied with the condition that ‘the settlement amount shall be paid by all applicants except Sobha Ltd on a joint and several liability basis’.

“Accordingly, noticees 2, 3, 4 and 5 paid the settlement amount jointly and severally as per the settlement terms,” Sebi said in the order.

Sebi had received the application for the settlement in November 2021.

The regulator had conducted an investigation into certain transactions undertaken by DKS and his family/associates which was allegedly against the interest of the minority shareholders of Sobha Ltd.

The period of examination was three financial years — 2016-17, 2017-18 and 2018-19.

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