sebi:Order/BS/SL/2024-25/30612-30613
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Facts / Headnote
Noticees 1 and 2 found to have failed in Audit Committee obligations; violations held to attract consideration of monetary penalty under Section 15HB of SEBI Act
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 149(12)
- s. 2(60)
- s. 177
- s. 146
- s. 66
- s. 43
- s. 188
- s. 134
Regulations
- Reg. 201
- Reg. 18(3)
- Reg. 18
- Reg. 22
- Reg. 16(b)
Parties
- Dr. Rattan Sagar Khanna
- Ms. Ankita Mehrotra
Holding
Noticee 1 (Dr. Rattan Sagar Khanna) and Noticee 2 (Ms. Ankita Mehrotra), as Independent Directors and Audit Committee members of Kwality Ltd, violated Regulation 18(3) read with Schedule II Part C Para A of LODR by failing to ensure oversight of financial reporting, internal financial controls and risk management.
Full text
_________________________________________________________________________________ Adjudication Order in respect of Kwality Ltd Page 2 of 45
_________________________________________________________________________________ Adjudication Order in respect of Kwality Ltd Page 3 of 45 Sr No Name Designation Appointment Date Cessation Date 1 Dr. Rattan Sagar Khanna Independent Director May 18, 2010 October 08, 2015 Independent Director and Non – Executive Chairman October 08, 2015 - 2 Ms. Ankita Mehrotra Independent Director January 23, 2016 July 28, 2018
_________________________________________________________________________________ Adjudication Order in respect of Kwality Ltd Page 4 of 45 6.4 The Company diverted funds through fictitious purchases and there have been deliberate falsification of books of accounts through further booking of fictitious sales in collusion with the parties. The Company had not initiated any legal steps for recovery of the receivables despite going through a severe liquidity crisis, which indicated that there is a deliberate misrepresentation of books of account by the company, in as much as admitting that the amount may not be recoverable from these Customers.
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