sebi:WTM/AB/CFID/CFID_3/22165/2022-23
Facts / Headnote
Penalties imposed on the Noticees under Section 15A(a) of the SEBI Act, 1992; SCN allegations substantially upheld
Provisions invoked
- s. 11
- s. 11(4)
- s. 15A
- s. 19
- s. 11(1)
- s. 11B
- s. 12A
- s. 11(2)
- s. 15H
- s. 27
- s. 15J
- s. 11C
- s. 11C(3)
- s. 15F
- s. 2(1)
- s. 20
- s. 2(51)
- s. 134
- s. 27(2)
- s. 143(12)
Regulations relied on
- SEBI (LODR) Regulations, 2015 — 4(1)(a)
- SEBI (PFUTP) Regulations, 2003 — 3(d)
Parties
- SecureKloud Technologies Ltd.
- V. Suresh (Noticee No. 2)
- R. S. Ramani (Noticee No. 3)
- Noticee No. 4
Holding
The Noticees were found to have engaged in fraudulent and unfair trade practices including manipulation of books of accounts through fictitious revenue and expenditure, and penalties were imposed under Section 15A(a) of the SEBI Act, 1992. The demand for cross-examination of forensic report authors was rejected as the Noticees had acted in a cavalier manner and the request was not pursued properly.
Full text
Final Order in the matter of SecureKloud Technologies Ltd. Page 2 of 132 indicated that suspected offences including fraud have been committed in the Company. Deloitte, citing various irregularities and inconsistencies in financial statements of the Company filed a report with Ministry of Corporate Affairs on September 13, 2019 under Section 143(12) of the Companies Act, 2013 (hereinafter referred to as “Deloitte Report”) and subsequently, resigned as statutory auditors of the Company on November 15, 2019. To look into the observations on irregularities and inconsistencies in the books of accounts of the Company as pointed by Deloitte, the Company appointed PKF Sridhar & Santhanam LLP (hereinafter referred to as “PKF”) on July 23, 2019, to conduct a forensic review of the books and accounts of the Company. The Company appointed KPSN & Associates LLP (Hereinafter referred to as “KPSN”) on November 07 as new forensic auditors and on November 08, 2019, disengaged the services of PKF. KPSN submitted its report (hereinafter referred to as “KPSN Report”) to the Company on January 04, 2020. It has been alleged in the SCN that PKF eventually submitted its report (hereinafter referred to as “PKF Report”) to the Company on January 09, 2020. Pursuant to receipt of several complaints alleging inter alia financial misreporting/irregularities by promoters and management of the Company and the aforementioned report by Deloitte, received by SEBI on December 10, 2019, SEBI initiated an invest
Final Order in the matter of SecureKloud Technologies Ltd. Page 3 of 132 violated. GT submitted its Forensic Audit Report (hereinafter referred to as “GT Report”) to SEBI on June 14, 2022.
Final Order in the matter of SecureKloud Technologies Ltd. Page 4 of 132 5. The SCN was served upon the Noticees on August 04, 2022.
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Source: SecMarx — sebi:WTM/AB/CFID/CFID_3/22165/2022-23. 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.