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SEBI Imposes Rs 10 Lakh Fine On Five Entities For Misrepresentation Of Funds

In the latest order, the regulator levied a fine of Rs 10 lakh on noticees -- MPF Systems Ltd (MPFSL), Kirti Salvi, Anil Kothari, Aakesh Chopra and Ambrish Barsati Pal -- for violating provisions of fraudulent trading, listing conditions and other disclosure lapses.

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SEBI Imposes Rs 10 Lakh Fine On Five Entities For Misrepresentation Of Funds

Capital markets regulator SEBI on Thursday imposed penalties totalling to Rs 10 lakh on five entities, including four individuals, in a case related to misrepresentation in the company's financial details.

In the latest order, the regulator levied a fine of Rs 10 lakh on noticees -- MPF Systems Ltd (MPFSL), Kirti Salvi, Anil Kothari, Aakesh Chopra and Ambrish Barsati Pal -- for violating provisions of fraudulent trading, listing conditions and other disclosure lapses.

The amount has to be "paid jointly and severally" by the noticees, the order said. In its order SEBI noted that SAT has passed two orders in two separate appeals filed by the noticees. 

One in September 2020, where SAT (Securities Appellate Tribunal) granted relief to the appellants by reducing the debarment period from six months when 40 days were still left to be completed.

Second, in March 2022, the tribunal remanded the case back to Sebi for reconsideration pertaining to enhanced penalties of Rs 34 lakh imposed on noticees.

Passing a 15-page order, Sebi said, noticees have misrepresented the financial statement with respect to making provisions for sundry debtors (non-existent) to the extent of Rs 5.97 crore and making incorrect classification of creditors as trade payables.

The order came after Sebi initiated action in the matter after receiving a forensic audit report in September 2018. The independent auditor was appointed by BSE to verify if there was any misrepresentation related to financials and business of MPFSL and misuse of funds/books of accounts of MPFSL. MPF Systems was in the list of 331 suspected shell companies released by corporate affairs ministry in June 2017.

-With PTI Input

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