sebi:QJA/VS/CFID/CFID/29159/2023-24
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Facts / Headnote
TBVFL held to have misrepresented financial statements on eight counts; Noticees No. 2 to 8 debarred from securities market and from association with listed companies/SEBI intermediaries for 18 months and penalties imposed
Provisions invoked
- s. 11
- s. 15
- s. 19
- s. 11B
- s. 12A
- s. 15H
- s. 27
- s. 15J
- s. 15F
- s. 45
- s. 179
- s. 34(2)
- s. 27(2)
- s. 66
- s. 42
- s. 133
- s. 33(2)
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 12
- Reg. 4(2)
- Reg. 4(2)(f)
- Reg. 3(b)
- Reg. 201
- Reg. 33
- Reg. 4(2)(r)
- Reg. 4(2)(k)
- Reg. 4(1)(a)
- Reg. 48
- Reg. 17(8)
- Reg. 33(2)(a)
- Reg. 16
- Reg. 2(1)(f)
Parties
- Talwalkars Better Value Fitness Limited
- Anant Gawande
- Harsha Bhatkal
- Girish Nayak
Holding
TBVFL misrepresented its financial statements and is liable therefor, and Noticees No. 2 to 8 defrauded/misled investors and impaired market integrity by failing to present a true and fair view, and are therefore debarred for 18 months and penalized.
Full text
Order in the matter of Talwalkars Better Value Fitness Limited Page 2 of 83 1.2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) was in receipt of several complaints against TBVFL and THL during the period from August 2019 to October 2019. The complaints, inter alia, indicated default in payment of interest on term loan despite significant cash balance. As per the financial results ending March 2019, both the companies (TBVFL and THL) had a total cash balance of approximately ₹77 Crores and total default by both the companies of interest payment as on July 2019 was only ₹3.5 Crores (Term Loan) which raised suspicion over the authenticity of their books of accounts.
Order in the matter of Talwalkars Better Value Fitness Limited Page 3 of 83 pursuant to their demerger, they were required to maintain separate bank accounts, whereas they continued to maintain same bank accounts in respect of all their branches. The bank accounts were maintained branch- wise and each branch had a ‘Collection account’ and a ‘Payment account’. The bank balances were proportionately transferred to THL to prepare the financial statements (through a book entry) at the end of each FY till FY 2017-18. The proportionate transfer of balances was based on a management estimate without any underlying rationale.
Order in the matter of Talwalkars Better Value Fitness Limited Page 4 of 83 Particulars Amount Add: Difference in balance due to genuine reconciling items. 104.13
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Source: SecMarx — sebi:QJA/VS/CFID/CFID/29159/2023-24. 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.