SEBI has banned Kalahridhaan Trendz, its managing director Niranjan D Agarwal, and two others from the securities market within a year of the SME’s listing. The ban comes as a result of alleged lapses in material disclosures and false communications to stock exchanges.
The investigation was initiated after HDFC Bank raised concerns about loan defaults by the SME. SEBI discovered that Kalahridhaan Trendz had not disclosed its loan defaults and had made false statements about a ₹115 crore order from Beximcorp Textiles. Additionally, there were misrepresentations about the company’s expansions.
According to SEBI’s whole-time member Ashwani Bhatia, the misleading corporate announcements made by Kalahridhaan Trendz had a positive impact on the stock price and trading volume. It was evident that the company aimed to attract investors by painting a favorable picture of its prospects through false information.
The interim order also mentioned that the SME had approved a rights issue worth ₹21 crore, and the promoter lock-in post-IPO was set to expire, potentially allowing them to exit the company. This raised concerns about investors being misled and left in a vulnerable position.
SEBI has asked Kalahridhaan Trendz and the other parties involved to provide a response within 21 days regarding the inquiry and potential penalties. The regulator emphasized the need to halt further fundraising to prevent investors from facing losses due to deceptive practices.
The ban on Kalahridhaan Trendz and its directors highlights SEBI’s commitment to maintaining the integrity of the securities market and protecting investors from fraudulent activities.
