New Delhi, July 30 In a jolt to real estate company Omaxe, the Securities and Exchange Board of India (SEBI) on Tuesday banned the company's top management, including Chairman Rohtas Goel, from the securities market for two years.
The markets regulator also barred the company's Managing Director Mohit Goel and three others from the securities market for irregularities in the company's financial statements.
The SEBI said in its "final order in the matter of misstatements and irregularities in the financial statements of Omaxe Limited" that these people have been "prohibited from holding any position as Director or Key Managerial Person of any other listed company for two years".
The markets regulator also imposed a Rs 47 lakh fine on 16 entries which need to be paid within 45 days.
"SEBI was in receipt of complaints against Omaxe Limited for fraudulent transactions, diverted/siphoned of funds, misrepresented the financial statements, inflated turnover etc," read the 126-page order.
As these allegations were serious in nature, the matter was taken up for further examination by SEBI, including conducting a forensic audit into the affairs of Omaxe. The order stated that these entities have "acted in concert to execute a fraudulent scheme which they tried to portray as normal transactions for the benefit of the company although it was experiencing loss, while also trying to portray that these as merely lending activities, thereby trying to maintain the price of the scrip of Omaxe for three years''.
According to the markets regulator, the real estate company misrepresented the financial statements during 2018-19, 2019-20, and 2020-21 including revenue, debtors, advances, and expenses. The fraud was never disclosed to the shareholders of Omaxe.
The probe observed that "Omaxe and its management, knowingly, reported wrong, false, manipulated financial statements to create an impression among the investors that the financial statements as published by the company, were reflecting true and fair view of the company’s financial performance".
"It was alleged that they were knowingly involved in manipulations/ irregularities in the company’s financials and thus, induced the investors for dealing in Omaxe scrip with an intention to deceit upon them in order to maintain the price of the scrip to take the advantage of their pledged shares," read the SEBI order.
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