Sebi disposes of adjudication proceedings against Sobha

Sebi disposes of adjudication proceedings against Sobha

The Securities and Exchange Board of India (Sebi) has disposed of its adjudication proceedings against realty firm Sobha and four individuals in a case related to fraudulent trading and disclosure lapses. A settlement amount of Rs 2.92 crore was paid by the four individuals.

Sebi had conducted an investigation into certain transactions by Sobha with D K Shivakumar and his family which was allegedly against the interest of the minority shareholders of Sobha. This was for fiscal years FY17 to FY19. It was alleged that Sobha fraudulently misrepresented the receivables with respect to the construction of residence of DKS in FY17, FY18 and FY19 and the corresponding provisioning for the same during this time.

Service tax and GST dues of DKS were also misrepresented during the same period without disclosure of a change in accounting policy.

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All this allegedly led to publication of manipulated financial results for the three years, which painted a false picture about the financial health of the company. Apart from Sobha, the proceedings were initiated against the company’s then executive directors Ravi Menon, Jagdish Sharma and Ramakrishnan Prabhakaran, along with CFO Subhash Bhat. Following the settlement, the adjudication proceedings initiated against the entities in September 2021 have been disposed of by the regulator.