sebi:WTM/MPB/ISD/16/2017
Facts / Headnote
Modified the actions envisaged in SEBI's letter dated August 07, 2017: reverted trading to XT group in trade-to-trade category, directed appointment of independent forensic auditor, permitted promoters/directors only to buy (not sell) securities, and continued other actions in para 1(d) of the August 7, 2017 letter.
Provisions invoked
- s. 11B
- s. 11(4)
- s. 11(1)
- s. 19
Parties
- M/s Kavit Industries Limited
Holding
SEBI found prima facie evidence that Kavit Industries Limited misrepresented its financials and misused its books of accounts and funds, and accordingly modified the earlier trading restrictions by reverting the scrip to XT group in trade-to-trade category, directing a forensic audit, and restricting promoters/directors to only buying (not selling) securities.
Full text
Order in the matter of M/s Kavit Industries Limited Page 2 of 15 (b) Misusing the books of accounts/funds of the company including facilitation of accommodation entries to the detriment of minority shareholders and therefore reneging on the fiduciary responsibility cast on the board, controlling shareholders and key management person (KMP)
Order in the matter of M/s Kavit Industries Limited Page 3 of 15 7. On August 09, 2017, SEBI further advised the Exchanges to submit a report after seeking auditor's certificate, from all such listed companies, providing the status of certain aspects of the company like company's compliance requirement with Companies Act, whether company is a going concern and its business model, status of compliance with listing requirements, etc.
Order in the matter of M/s Kavit Industries Limited Page 4 of 15 nature of quasi-judicial order and the same has been passed with out investigation. Without prejudice to the powers enumerated in section 11(1) of SEBI Act, SEBI has been granted power under section 11(4) and 11B of SEBI Act, 1992 to pass order in the interests of investors or securities market by taking any of the measures enumerated therein either pending investigation or inquiry or on completion of such investigation or inquiry. The inquiry under section 11B of the SEBI Act can also be caused to be made by SEBI.
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Source: SecMarx — sebi:WTM/MPB/ISD/16/2017. 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.