sebi:WTM/AB/IVD/ID19/13894/2021-22
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Provisions invoked
- s. 11B
- s. 11
- s. 15A
- s. 19
- s. 11(1)
- s. 12A
- s. 11(2)
- s. 15H
- s. 27
- s. 15J
- s. 12
- s. 15F
- s. 149(6)
- s. 21
- s. 23E
- s. 23H
- s. 166
- s. 133
- s. 14
- s. 29A
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 4(2)
- Reg. 4(2)(f)
- Reg. 200
- Reg. 3(b)
- Reg. 2(1)
- Reg. 201
- Reg. 33
- Reg. 30
- Reg. 4
- Reg. 4(1)(a)
- Reg. 30(1)
- Reg. 34(1)
- Reg. 30(4)
- Reg. 6(1)
- Reg. 13(3)
- Reg. 31(1)
- Reg. 48
- Reg. 17(8)
Parties
- Info-Drive Software Limited (Noticee No. 1)
- Directors and Chief Financial Officer of Info-Drive Software Limited (Noticee Nos. 2 to 7)
- Smitha Ramchandran (Noticee No. 4)
- Statutory Auditor of Info-Drive Software Limited (Noticee No. 8)
Holding
The order finds that Info-Drive Software Limited misrepresented its financial and cash-flow statements and violated LODR Regulations, and holds that the CIRP moratorium under the IBC does not bar continuation of SEBI proceedings for determination of liability against the company and its erstwhile directors and statutory auditor.
Full text
Final Order in the matter of Info-Drive Software Limited Page 1 of 95 WTM/AB/IVD/ID19/13894/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA FINAL ORDER
Final Order in the matter of Info-Drive Software Limited Page 2 of 95 (hereinafter referred to as “SEBI”). The first show cause notice (hereinafter referred to as “SCN 1”) was issued to the Noticees no. 1 to 7 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), 11A 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 23E and 23H of Securities Contracts (Regulations) Act, 1956 (hereinafter referred to as “SCRA, 1956”) against them. The second show cause notice (hereinafter referred to as “SCN 2”) was issued by SEBI to the Noticee no. 8 asking them to show cause as to why suitable directions be issued, as deemed fit under Section 11, 11B and 11D of the SEBI Act, 1992 against them. The SCN 1, inter alia, alleged that Info-Drive Software Limited (hereinafter also referred to as “ISL” / “the company”) had failed to present true and fair financial statements and had executed transactions which are non-genuine in nature tantamounting to misrepresentation of the accounts/ financials statement and misuse of account/ funds of the company. It was further alleged that Noticee no.1 had misused funds/ misrepresented books of accounts which are detrimental to the interests of genuine investors and are fraudulent in nature. It was also alleged that
Final Order in the matter of Info-Drive Software Limited Page 3 of 95 negligent in performance of its duties as they have not carried out proper due diligence and have not reported these findings in its audit report. Further, the incorrect, irregular and misleading certification of financial statements by the statutory auditor resulted in the public being misled about the financial health of the company.
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Source: SecMarx — sebi:WTM/AB/IVD/ID19/13894/2021-22. 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.