Sebi bars EKI Energy and MD from securities market
The markets regulator imposed penalties totalling Rs 88 lakh for misrepresenting financial statements and diverting funds at the carbon credits trading firm.
The markets regulator Sebi has prohibited EKI Energy Services Ltd from the securities market for two months and its Managing Director Manish Kumar Dabkara for 12 months. The action follows findings that the carbon credits trading firm misrepresented financial statements and diverted funds.
In a 94-page final order, Sebi stated that EKI prematurely recognised revenue of Rs 197.04 crore during the first three quarters of FY23. The regulator noted this misrepresentation was connected to investor decisions regarding the listed shares.
The regulator also found that the company overstated expenses by Rs 26.34 crore during FY22 and FY23, which resulted in an understatement of profits. Sebi said the company booked fictitious expenses for services not rendered, leading to the diversion of funds.
Sebi has restrained former CFO Mohit Kumar Agarwal from the market for eight months, while whole-time directors Naveen Sharma and Sonali Sheikh face bans of five months and one month respectively. The regulator held Sharma, Sheikh, and Agarwal liable for regulatory violations.
Monetary penalties totalling Rs 88 lakh were imposed on the company and several individuals. EKI Energy Services was fined Rs 12 lakh, Dabkara Rs 28 lakh, Sharma Rs 13 lakh, Sheikh Rs 6 lakh, and Agarwal Rs 19 lakh.
Additional penalties were levied on former compliance officer Itisha Sahu, Ritesh Gupta, and Burhanuddin Ali Husain Maksi Wala. The entities must pay these fines within 45 days, and Dabkara was directed to recoup the diverted amount.