look news india
SBEI : Market regulator Securities and Exchange Board of India (SEBI) has taken major action against two SME companies involved in the scam. SEBI has taken action against two SME companies over irregularities in financial accounts. The promoters themselves are accused of raising and dumping the shares of the companies. SEBI conducted the investigation between April 1, 2020 and March 31, 2023 and revealed the irregularities.
SEBI alleging rise and fall in shares
Ad Shop e-retail, White Organics Agro has been banned. Promoters are accused of selling and selling shares of their own companies. SME companies showed growth in turnover through outsourcing from related party companies. SEBI has banned promoter Dineshbhai Pandya and others.
The promoters' stake has also reduced amid the turmoil in the financial accounts. The promoters' stake has come down from about 63 percent to 36 percent. The case against the auditors of both the companies has been referred to NFRA.
How were investors wooed?
To attract investors, SMEs gave 2-2 bonus shares in one and a half years. The MOU was announced, but not all details were given. The board member alleged that the company's name had been misused. SEBI alleged that audit committee meetings were held on paper.