Sebi Ban Omaxe: SAT stays Sebi’s two-year securities market ban on Omaxe and executives
The Securities Appellate Tribunal (SAT) has stayed a Securities and Exchange Board of India (Sebi) order that barred realty firm Omaxe, its Chairman Rohtas Goel, Managing Director Mohit Goel, and others from the securities market for two years for misrepresentation in the company’s financial statements.
Background
The ban imposed by Sebi on Omaxe and its executives was challenged by the company and others. In its ruling on October 1, the appellate tribunal stated that the ban would remain stayed, subject to the deposit of penalty amount by the appellant within four weeks.
The paragraph numbers 411 and 2 in the Sebi order pertain to the securities market ban and the prohibition from holding any position as key managerial personnel of any other listed company imposed on individuals by Sebi.
Positive Outcome for Omaxe
Omaxe’s Managing Director Mohit Goel expressed his satisfaction with the stay order. With the ban now lifted, the company can raise capital and continue its operations without any disruption. Mohit Goel affirmed Omaxe’s commitment to transparency and maintaining the trust of its investors and stakeholders. The company intends to fully cooperate with the authorities and focus on its ongoing projects, ensuring sustained value creation and growth.
Sebi’s ruling had not only imposed a two-year ban on Omaxe and its key executives but also prohibited them from holding any position as Directors or Key Managerial Persons in any other listed company for two years. The order also levied penalties on numerous entities, including Omaxe and its executives.
Sebi’s Observations
Sebi highlighted that Omaxe had misrepresented its financial statements during the fiscal years 2018-19, 2019-20, and 2020-21. The company manipulated various items in its financial statements, including revenue, debtors, advances, and expenses. This misrepresentation aimed to maintain the price of Omaxe’s scrip for three years and protect the collateral kept by the promoter against loans.
The authorities further emphasized that Omaxe’s fraudulent behavior was not disclosed to its shareholders, which misled them into remaining invested in the company’s shares or dealing in its securities. The misrepresentation of Omaxe’s books and accounts also misled investors in the securities market.
The order imposed a penalty of Rs 47 lakh on Omaxe and 16 other entities involved. Penalties ranged from Rs 1-7 lakh.
In Conclusion
The stay order from the Securities Appellate Tribunal brings relief to Omaxe and its key executives by temporarily lifting the ban imposed by Sebi. This allows the company to resume its activities in the securities market and raise capital as needed. Omaxe has expressed its commitment to transparency and continues to cooperate fully with the authorities. As the case progresses, it remains crucial for Omaxe to regain the trust of its stakeholders and investors through honest and ethical practices in its financial statements.
