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Sebi imposes Rs 50 lakh fine on Surana Corp, previous MD

New Delhi: Sebi on Friday slapped a whole fine of Rs 50 lakh on Surana Company and its former handling director Vijayraj Surana for inflating the company’s asset position and non-disclosure of price delicate information.
The regulator levied a penalty of Rs 25 lakh just about every on Surana Corporation Ltd (SCL) and Surana.
Aside from, it levied a great of Rs 1 lakh on company’s statutory auditor Prithviraj Jain.
The regulator experienced performed a probe following a grievance been given from Chennai Zonal Unit – Section of Revenue Intelligence (DRI), Ministry of Finance in the matter.
The criticism outlined that a research procedure was performed by DRI at the showroom and factory premises of SCL throughout Oct 2014.
Pursuant to the research, smuggled gold held by SCL was seized and many other facts had been unearthed which include things like fabrication of sales/obtain/inventory paperwork for artificially inflating its asset position on paper and using the exact as a major security for availing loans from financial institutions.
Sebi, for the duration of the system of investigation, uncovered that the organization didn’t have gold stocks and experienced simply falsified these shares in its guides of accounts and inflated its asset position with respect to gold stocks to the tune of Rs 294.23 crore.
This overstatement or fake statements by SCL guide to the violation of Prohibition of fraudulent and Unfair Trade Practice Regulations (PFUTP), Sebi stated in an order.
More, the enterprise did not disclose the price delicate details pertaining to raid on its premises to the inventory exchanges.
By executing so, the company failed to comply with the requirements of Equity Listing Agreement and LODR (Listing Obligations and Disclosure Specifications) norms, Sebi mentioned.
Surana was the running director of SCL when the raid was done, and was immediately in demand of the day to day affairs of SCL.
For that reason, he cannot escape his liability for failure to disclose the fact about raid and seizure to the exchanges, the order said.
SCL also failed to present bank statements as effectively as ledgers of all bank accounts for 2012-15 made up of particulars of debit/credit of quantity paid out/received from its counterparties irrespective of getting requested by the regulator.
The transactions of obtain and sales amounting to Rs 647 crore and Rs 643 crore, respectively, entered into concerning SCL and its counterparties ended up overstated in the books of accounts of SCL, Sebi famous.
These falsified figures had been reported in the yearly fiscal outcomes submitted to exchanges in the course of 2013-15, when Surana was the MD of SCL, and he misled the shareholders of SBL by earning fake declaration that all board associates and senior administration personnel of the company had complied with the company’s code of perform, the regulator claimed.
Fake statements inflating SCL’s assets, non-disclosure of price sensitive details, sham transactions with similar entities, contradictory statements of Surana, non-publication of auditor’s report along with fiscal studies in stipulated time “can make it clear that the method of performing of the firm is detrimental to the interests of the investors,” Sebi mentioned.
On Jain, Sebi stated he experienced accredited in the company governance report that the business had complied with all the necessities approved beneath the Equity Listing Arrangement in spite of a variety of non-compliances, primarily overlooking the faulty composition of audit committee.
The non-reporting of the defective composition of the audit committee is a misconduct on the part of Jain, displaying absence of desired level of competence, the regulator explained.


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