sebi:Order/SM/AD/2022-23/22328-22334
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Facts / Headnote
Violation of Section 12A(a),(b),(c) of the SEBI Act read with Regulations 3(b),(c),(d) and 4(1) and 4(2)(f) of the PFUTP Regulations found against CKFSL and certain Noticees; penalty imposed under Section 15HA of the SEBI Act; benefit of doubt given to Noticees 1, 2, 4, 5 and 6
Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 133
- s. 129
- s. 129(1)
- s. 129(7)
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 4(2)
- Reg. 4(2)(f)
- Reg. 3(b)
Parties
- Cox and Kings Financial Service Limited (CKFSL)
- Mr. Vellatu Puthanveetil Ravindran Menon
- Mr. Sampath Kumar Krishnan
- Mr. Shailesh Pednekar
- Mr. Bapi Munshi
- Ms. Matangi Gowrishankar
- Mr. Jayesh Shah
- Mr. Milind Gandhi
Holding
CKFSL and Noticees 3 and 7 were found to have violated Section 12A(a),(b),(c) of the SEBI Act read with Regulations 3(b),(c),(d) and 4(1) and 4(2)(f) of the PFUTP Regulations by publishing financial statements that did not present a true and fair view, having overstated profit before tax by Rs. 3.81 crores for the nine-month period ending December 31, 2018. Noticees 1, 2, 4, 5 and 6 were given the benefit of doubt due to absence of conclusive evidence of their knowledge or involvement.
Full text
Adjudication Order in the matter of Cox and Kings Financial Service Limited Page 2 of 30 Exchange of India Limited (‘NSE’) (hereinafter collectively referred to as “stock exchanges”) with effect from April 11, 2019. Securities and Exchange Board of India ("SEBI") received a complaint dated June 14, 2019 on SCORES against CKFSL, inter-alia, alleging insider trading and employment of bad accounting practices. Based on the complaint, SEBI conducted investigation in the matter of CKFSL during the period from April 01, 2018 to March 31, 2019 (hereinafter referred to as “investigation period”), to ascertain whether the published financial statements of the company were prepared in accordance with the applicable and notified accounting standards and whether there was any violation of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) and SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as ‘PFUTP Regulations’).
Adjudication Order in the matter of Cox and Kings Financial Service Limited Page 3 of 30 case has been transferred to undersigned. It has been advised that except for the change of the Adjudicating Officer, the other terms and condition of the original orders (whereby the 2nd erstwhile AO was appointed) ‘shall remain unchanged and shall be in full force and effect’. It has also been advised that ‘I shall proceed in accordance with the terms of reference made in the Original Orders read with this Order.’
Adjudication Order in the matter of Cox and Kings Financial Service Limited Page 4 of 30 b) From the audited financial results for FY 2018-19 filed by the Company on May 29, 2019, the figures of quarterly profit before tax for 4 quarters of FY 2018-19 were observed as under:
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Source: SecMarx — sebi:Order/SM/AD/2022-23/22328-22334. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.