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Issues involved: Violation of Regulations 3 and 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 by the appellant, leading to misleading financial results and market manipulation.
Summary: The appeal was filed against an order by SEBI restraining the appellant from securities dealings and holding directorship in a listed company for three years due to involvement in inflating revenues and profits through fictitious entries in the company's accounts. The investigations revealed serious irregularities in the company's financial reporting, leading to misleading information for investors. The appellant, as chairman and whole time director, was part of the board approving false financial results, violating SEBI regulations prohibiting fraudulent practices in securities dealings. The appellant's claim of financial illiteracy and resignation from directorship were not considered as mitigating factors, as he held a key position in the company and approved misleading financial accounts. The appeal was dismissed, upholding SEBI's decision to bar the appellant from market activities and directorship for three years. In conclusion, the appellant's involvement in approving false financial results, despite being part of the board, led to serious market violations, justifying SEBI's actions to prevent further harm to investors and the securities market.
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