sebi:Order/MC/VS/2019-20/6215-6222
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Facts / Headnote
Charges of misrepresentation of financial statements and misuse of funds not established; monetary penalties imposed on directors for failure to disclose related party transaction
Provisions invoked
- s. 11B
- s. 11
- s. 15A
- s. 15
- s. 19
- s. 12A
- s. 21
- s. 11(2)
- s. 15H
- s. 15J
- s. 23J
- s. 23
- s. 23E
- s. 23H
Regulations
- Reg. 11
- Reg. 3
- Reg. 4
- Reg. 4(1)
- Reg. 17
- Reg. 15
- Reg. 18(1)
- Reg. 18
- Reg. 201
- Reg. 46
- Reg. 103
- Reg. 19
- Reg. 33
- Reg. 6
- Reg. 6(1)
- Reg. 48
- Reg. 47
- Reg. 18(1)(b)
- Reg. 19(1)(c)
- Reg. 35
Parties
- Ritman Infra Limited
- Mr. Parag Majmudar
- Mrs. Falguni Majmudar
- Mr. Dinesh Majmudar
- Mrs. Pushpa Majmudar
- Mrs. Lipika Ray
- Mr. Dibyendu Sarkar
Holding
The charges of misrepresentation of financial statements and misuse of funds in violation of Section 12A of the SEBI Act and PFUTP Regulations were held not established; Noticee Nos. 2 to 6 and 8 were held liable under Section 15HB of the SEBI Act for failure to disclose a Rs. 0.17 crore related party transaction under Regulation 4(2)(f)(i)(1) and 4(2)(f)(ii)(6) of the LODR Regulations.
Full text
Page 2 of 49 Adjudication Order in respect of Ritman Infra Ltd. and seven directors in the matter of Ritman Infra Ltd. BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) directed the Metropolitan Stock Exchange of India Limited (“MSEI”) to appoint an independent forensic auditor to carry out the forensic audit of Ritman Infra Limited (“RIL” or “Noticee No.1”), a company listed on MSEI, pursuant to SEBI’s interim
Page 3 of 49 Adjudication Order in respect of Ritman Infra Ltd. and seven directors in the matter of Ritman Infra Ltd. 3. The appointment of the AO was communicated vide order dated November 29,
Page 4 of 49 Adjudication Order in respect of Ritman Infra Ltd. and seven directors in the matter of Ritman Infra Ltd. the Financial Statements could not be genuine or in the normal course of business of the RIL (Refer page No. 10 of the forensic audit report). ii. Tangible Fixed assets: The balance sheet for FY 2015-16 & FY 2016- 17 states the tangible fixed assets to be Rs. 28,53,041/- and Rs. 36,23,119/- respectively. Since RIL has not furnished the required information/supporting documents such as invoices, whereabouts and usage, as sought by the Auditor to arrive at concrete findings, the Forensic Auditor reached an opinion that the Tangible Fixed Assets being displayed could not be genuine or in the normal course of business of RIL/Noticee 1 (Refer to page No. 11 of the forensic audit report). iii. Investment in Securities (non-current investments): The balance sheet for FY 2015-16 & FY 2016-17 states total non-current investments to be Rs. 82,78,174/- and Rs. 4,12,42,819/- respectively. The company made investments in equity shares of subsidiaries and other entities (which are enterprises owned or significantly influenced by key management persons), as well as in gold and in property. The total investments in securities is shown as Rs. 72,44,439/- in FY 2015-16, and Rs. 65,19,300/- in FY 2016-17. Investment in the shares of Ritman Stara Chem Sdn Bhd (“RSCSB”) by RIL is shown to be Rs.64,17,300/-. RIL also provided Financial Statements of Ritman Stara Chem Sdn Bhd (100%
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