4 days ago
SEBI Bars Trafiksol, Promoters Over Misleading IPO Disclosures
SEBI is India’s market regulator.
It investigated Trafiksol’s planned stock-market listing.
The regulator said some of Trafiksol’s financial numbers and IPO disclosures were misleading.
It said the company overstated revenue and recorded purchases that were not genuine.
SEBI also questioned a planned ₹17.70-crore software purchase from a company it described as a shell entity.
Trafiksol and its two promoters were barred from the securities market for one year.
They were also ordered to pay fines totaling ₹1.05 crore.
The IPO was cancelled before listing, so investors were refunded with interest.
Trafiksol’s appeal against an earlier SEBI order was dismissed by the Securities Appellate Tribunal.
SEBI barred Trafiksol ITS Technologies and promoters Jitendra Narayan Das and Poonam Das from the securities market for one year.
The regulator imposed total penalties of ₹1.05 crore: ₹30 lakh on Trafiksol, ₹50 lakh on Jitendra Das and ₹25 lakh on Poonam Das.
SEBI said Trafiksol inflated FY24 revenue by ₹22.01 crore and recorded fictitious purchases worth ₹8.95 crore.
The findings concerned misleading IPO disclosures, including major customers, suppliers, issue expenses, financial relationships and a proposed ₹17.70-crore software purchase.
Trafiksol’s ₹44.87-crore SME IPO was cancelled after regulatory intervention, and investors received subscription money back with interest.
- Who
- SEBI, Trafiksol ITS Technologies, promoters Jitendra Narayan Das and Poonam Das, and IPO investors.
- What
- SEBI barred Trafiksol and its promoters from the securities market for one year and imposed penalties over alleged misleading disclosures and other violations.
- Where
- The matter concerned Trafiksol’s SME IPO and its disclosures to India’s securities regulator.
- When
- The final order was published on August 28, 2026; the investigated IPO was planned for September 2024.
- Why
- SEBI said Trafiksol’s financial statements, IPO disclosures and investigation responses contained misleading or false information.
SEBI’s Findings
Company’s Position and Outcome
Accuracy of financial disclosures
SEBI’s Findings
SEBI said Trafiksol’s FY24 financial statements materially misrepresented its operations, including inflated revenue, fictitious purchases and journal entries used to increase turnover.
Company’s Position and Outcome
Trafiksol challenged SEBI’s earlier action, but the provided articles do not state a detailed defense of the disputed financial figures.
Software vendor verification
SEBI’s Findings
SEBI said the quotation for the proposed ₹17.70-crore software purchase came from Oasis Corpcare, which it described as a shell entity lacking credible technical or operational capabilities.
Company’s Position and Outcome
The Securities Appellate Tribunal dismissed Trafiksol’s appeal and said approving the purchase without verifying the vendor’s credentials did not meet desired corporate-governance norms.
Effect on IPO investors
SEBI’s Findings
SEBI cancelled the issue through regulatory intervention because of the concerns and ordered that investors be protected through refunds.
Company’s Position and Outcome
SEBI said IPO subscribers suffered no loss because the issue was cancelled and their subscription money was returned with interest.
Key facts
- Total penalties
- ₹1.05 crore
- Market-access ban
- One year for Trafiksol and both promoters
- IPO size
- ₹44.87 crore, comprising 64.10 lakh shares
- IPO subscription
- Nearly 346 times subscribed
- Revenue allegedly inflated
- ₹22.01 crore in FY24
- Fictitious purchases identified
- ₹8.95 crore from Limco and Ishira
- Proposed software purchase
- ₹17.70 crore, supported by a quotation from Oasis Corpcare
- Investor refunds
- Subscription money was refunded with interest after the issue was cancelled
Quotes
Amarjeet Singh
SEBI Whole-time member who issued the statement in the final order
“The present case did not result in any loss to the IPO subscribers, since due to regulatory intervention, the issue was ultimately cancelled and the subscription monies were refunded with interest.”
thehindubusinessline.com
Sources
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