sebi:WTM/ASB/CFID/CFID-SEC4/30313/2024-25

SEBI · SEBI · 2019-07-07 · Ashwani Bhatia, Whole Time Member

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Noticees 1, 2, 3 and 10 restrained from securities market for 3 years and from holding director/KMP positions for 5 years with monetary penalties; Noticees 4, 5, 6 and 7 imposed monetary penalties only; proceedings against Noticees 8 and 9 disposed of without any direction.

Provisions invoked

Regulations relied on

Parties

Holding

SEBI held Manpasand Beverages Ltd., its Managing Director, Executive Director and CFO liable for preparation and publication of manipulated financial statements for FYs 2018-19 and 2019-20 and for failure to furnish information, imposing market restraint, position debarment and monetary penalties, while holding certain Audit Committee members liable under LODR Regulation 18(3) with monetary penalties only.

Full text

_____________________________________________________________________________________________ Order in the matter of Manpasand Beverages Limited Page 2 of 55 “MBL”) alleging suspected fraudulent transactions and high degree of financial mismanagement in the Company.

_____________________________________________________________________________________________ Order in the matter of Manpasand Beverages Limited Page 3 of 55 10 Mr. Bipin Motilal Rathod Independent Director 11-07-2019 30-09-2019 11 Mr. Uday J. Kamath Independent Director 02-08-2019 30-09-2019 12 Mr. Nishish Mobar Independent Director 09-10-2019 NA 13 Mr. Vimal R. Patel Independent Director 03-01-2020 NA 14 Mr. Kaushal Ameta Independent Director 03-01-2020 NA

_____________________________________________________________________________________________ Order in the matter of Manpasand Beverages Limited Page 4 of 55 said letter that Manpasand had floated 38 bogus/paper firms to inflate its turnover and that inward and outward transactions made with such bogus firms amount to Rs.188.48 Crore and Rs. 691.30 Crore, respectively. Further, Manpasand had also used input tax credit from fake invoices for payment of GST liabilities resulting into loss of GST revenue to exchequer. The quantum of GST evaded was to be ascertained only after completion of the investigation. 3.4. Post search and seizure proceedings by CGST, eight directors, including three independent directors, of the Company resigned from their positions between May 25, 2019 to September 30, 2019. Further, M/s Mehra Goel & Co., statutory auditors, resigned from their position with effect from July 4, 2019, by citing, inter alia, recent actions, including action and investigation initiated by Goods & Services Tax (GST) Authorities, resignation of the directors and the Company Secretary of the Company, as the reasons for resignation. 3.5. Finquest Financial Solutions Pvt. Ltd. (‘Finquest’), a Non-Banking Financial company (NBFC), sanctioned secured term loan of Rs 100 crore to Manpasand in July 2019. Finquest appointed Ernst & Young (‘E&Y’) to carry out the due diligence as one of the conditions for disbursement of the said loan. It was later brought to the notice of the Board o

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Source: SecMarx — sebi:WTM/ASB/CFID/CFID-SEC4/30313/2024-25. 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.