1 week ago
Sebi Bars Varanium Cloud, Promoter; Orders ₹128.77 Crore
Sebi is the regulator that oversees India’s stock market.
It said Varanium Cloud and its promoter, Harshawardhan Sabale, gave investors misleading information.
The regulator alleged that some sales and purchases recorded by the company were fictitious or lacked proper evidence.
It also said money raised from an IPO and a rights issue was sent to related parties and other entities.
Sebi said ₹62.51 crore was diverted, including ₹32.73 crore sent to Sabale.
Sabale was ordered to give back ₹128.77 crore in alleged unlawful gains.
Varanium Cloud was ordered to return ₹62.51 crore with interest.
Sebi barred the company and Sabale from the securities market for seven years and imposed fines on them and seven others.
Sebi barred Varanium Cloud Ltd and promoter Harshawardhan Sabale from securities markets for seven years.
Sabale was ordered to disgorge ₹128.77 crore in alleged unlawful gains, while Varanium Cloud must return ₹62.51 crore plus 12% interest.
The regulator alleged fictitious or unsupported transactions, misstated financial disclosures, and non-disclosure of pending litigation.
Sebi said ₹18.98 crore from the IPO and ₹43.53 crore from the rights issue were diverted to related parties and other entities, including ₹32.73 crore to Sabale.
The regulator also imposed total fines of ₹33.08 crore on Varanium Cloud, Sabale, and seven others over alleged financial misrepresentation and diversion of issue proceeds.
- Who
- The Securities and Exchange Board of India; Varanium Cloud Ltd; promoter Harshawardhan Sabale; and other individuals and entities named in the order.
- What
- Sebi barred Varanium Cloud and Sabale for seven years, ordered disgorgement and repayment of allegedly diverted funds, and imposed total fines of ₹33.08 crore on nine noticees.
- Where
- The action concerns Varanium Cloud and India’s securities markets; the order was issued by Sebi.
- When
- The final order was issued on Tuesday; the reported share-price period was 27 September 2022 to 31 May 2024.
- Why
- Sebi alleged that Varanium Cloud misrepresented its financials and disclosures, used fictitious or unsupported transactions, and diverted IPO and rights-issue proceeds.
Key facts
- Market ban
- Varanium Cloud Ltd and Harshawardhan Sabale were barred from the securities markets for seven years.
- Disgorgement
- Sabale was ordered to disgorge ₹128.77 crore in alleged unlawful gains, with 12% annual interest from the share-sale dates until deposit.
- Repayment
- Varanium Cloud was directed to bring back ₹62.51 crore plus 12% interest from the respective debit dates.
- Diversion breakdown
- Sebi identified ₹18.98 crore diverted from IPO proceeds and ₹43.53 crore diverted from rights-issue proceeds.
- Total fines
- Sebi imposed fines totalling ₹33.08 crore on Varanium Cloud, Sabale, and seven others.
- Share-price movement
- The share price rose from ₹131 on 27 September 2022 to ₹1,526.15 on 13 January 2023, then fell to ₹17.75 by 31 May 2024.
- Proposed acquisition
- Sebi said a proposed ₹2,683 crore acquisition of Fastway Transmissions, partly funded by a ₹1,250 crore preferential issue, did not go through and was used to mislead investors.
Quotes
Amarjeet Singh
Sebi Whole Time Member who issued the order
“A total of Rs 62.51 crore (Rs 18.98 crore from IPO proceeds and Rs 43.53 crore from rights issue proceeds) was diverted from the proceeds of IPO and rights issue to related parties and other entities (including Rs 32.73 crore to Sabale) and he granted the approvals for the transfers,”
freepressjournal.in
Sources
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