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Residential commercial developer, Sobha Limited has settled ₹2.925 crore with market regulator SEBI. Following this, the adjudication proceedings initiated against Sobha and its three Executive Directors have been disposed of. The settlement order has been passed on Monday and came into force with immediate effect.
Earlier, Sebi had initiated proceedings against Sobha, three executive directors namely – Ravi Puthan Naduvakkat Chentha Maraksha Menon, Jagdish Chandra Sharma, and Ramakrishnan Prabhakaran. Also, an investigation was carried out against Subhash Mohan Bhat, Chief Financial Officer under Sebi’s regulation for Fraudulent and Unfair Trade Practices.
The market watchdog had appointed Maninder Cheema as Adjudicating Office for the case.
Sebi conducted an investigation into certain transactions carried by Sobha with D.K. Shivakumar (‘DKS’) and his family members/associates which was allegedly against the interest of the minority shareholders of Sobha. The examination was conducted for three financial years namely FY17, FY18, and FY19.
As per Sebi’s statement, it was alleged in the show cause notice that Sobha fraudulently misrepresented the receivables w.r.t. construction of the residence of DKS in FY 2016-17, FY 2017-18, and FY 2018-19 and also the corresponding provisioning for the same during the said period.
Further, Sebi pointed out that it was also alleged that this act by Sobha led to the publication of manipulated financial results for the FY 2016-17, FY 2017- 18, and FY 2018-19, which were untrue and misleading and operated as deceit not only on the shareholders of Sobha but also on the public being misled about the financial health of the company.
Also, it was alleged that the misrepresentations by Sobha w.r.t. Service Tax/GST dues of DKS in FY 2016-17, FY 2017-18, and FY 2018-19 and non-disclosure of change in accounting policy for the same during the said period led to the publication of manipulated financial results.
Sobha was also alleged to have fraudulently misrepresented the advances paid to Vinay Karthik, Bhagyalakshmi, Gowramma, and D. K. Suresh in FY 2016-17, FY 2017-18, and FY 2018-19.
Following the above, Sobha agreed to pay ₹2.925 crore to settle the matter.
This case has now been settled.
On BSE, Sobha shares closed at ₹690.90 apiece down by 3.31%. The company’s market cap is around ₹6,552.90 crore.
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