sebi:WTM/AB/IVD/ID18/13195/2021-22

SEBI · SEBI · 2019-04-08 · ANANTA BARUA, WHOLE TIME MEMBER

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Facts / Headnote

Penalties imposed on Noticees; Noticees 2, 3 and 5 restrained from securities market for 1 year; Noticees 6, 8 and 9 restrained for 6 months; Noticee 10 (auditor) not penalized for fraud due to jurisdictional limits.

Provisions invoked

Regulations

Parties

Holding

SSWL and its directors were found to have published manipulated financial results for FY 2012-13 and 2013-14 by fraudulently overstating purchases and sales, violating PFUTP Regulations and Listing Agreement clauses; penalties were imposed under Sections 15A(a), 15HA, 15HB of SEBI Act and Section 23H of SCRA, with market restraints on executive and independent directors.

Full text

Final Order in the matter of Sun and Shine Worldwide Limited Page 2 of 65 asking them to show cause as to why suitable directions be issued and/or penalty be not imposed, as deemed fit under Section 11(1), 11(4), 11(4A) and 11B(1), 11B(2) read with Section 15A(a), 15HA and 15HB of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as “SEBI Act, 1992”), Section 12A(1) and 12A(2) read with Section 23H of Securities Contracts (Regulations) Act, 1956 (hereinafter referred to as “SCRA, 1956”) against them. The SCN, inter alia, alleged that Sun and Shine Worldwide Limited (hereinafter also referred to as “SSWL” / “the company”) had published manipulated financial results for the FY 2012-13 and 2013-14, which were untrue and misleading and operated as deceit not only on the shareholders of SSWL but also on the public being misleading about the financial health of the company.

Final Order in the matter of Sun and Shine Worldwide Limited Page 3 of 65 Jun-14 - 0.00 Sep-14 - 0.01 Dec-14 - 0.00 Mar-15 - 0.05 Jun-15 - 0.04 Sep-15 - 0.00 Dec-15 0.36 0.01 Mar-16 0.33 0.10

Final Order in the matter of Sun and Shine Worldwide Limited Page 4 of 65 company. Upon perusal of the same, there appeared to be an overstatement of purchases to the extent of Rs. 145.82 cr. in FY 2012-13 and Rs. 1416.6 cr. in FY 2013-14. Similarly, there appeared to be an overstatement of Sales to the extent of Rs. 145.80 cr. in FY 2012-13 and Rs. 1307.1 cr. in FY 2013-14. 2.6. Considering the substantial differences in submissions of the company and the broker, information was sought from stock exchanges (ICEX, NCDEX & MCX – Stock Exchanges on which trading was claimed by the company vide email dated April 9, 2019). The stock exchanges submitted details of trading of SSWL vide emails dated April 23, 24 & 25, 2019. The details provided by the stock exchanges were in line with that provided by the stock broker and it was observed that there was an overstatement of purchases to the extent of Rs. 146 cr. in FY 2012-13 and Rs. 1417 cr. in FY 2013-14. Similarly, there was an overstatement of Sales to the extent of Rs. 146 cr. in FY 2012-13 and Rs. 1310 cr. in FY 2013- 14 in the reported financial results of SSWL. 2.7. An explanation was again sought from the company vide email dated May 24, 2019 with respect to submissions of the broker and stock exchanges which are at variance with the company’s reported financial statements. The company, vide email dated July 25, 2019, shared text file purportedly containing bills from Indo Thai Commodities Private Limited as an evidence of tr

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Source: SecMarx — sebi:WTM/AB/IVD/ID18/13195/2021-22. 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.