The Securities and Exchange Board of India (SEBI) on Monday banned Kalahridhaan Trendz Ltd (KTL), which was listed on the NSE SME index on February 24 last year, and its directors from accessing the securities market until further orders.
The small and medium enterprise (SME) and its directors – Niranjan Agarwal, Aditya Agarwal and Sunitadevi Agarwal – have been charged with making questionable disclosures to mislead investors.
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According to an interim order-cum-show-cause notice, the SEBI’s examination of the company, held between February 23 and December 15 of 2024, started after HDFC Bank filed certain complaints regarding default in credit card dues. The lender’s complaint alleged that Niranjan Agarwal, managing director, also holds directorship in Katex Exim, of which the directors were clearing the dues to ensure no impediments in its IPO process while ignoring obligations of KTL.
The regulator found out that its May 2 disclosure of it capacity expansion plan leading to a 25% increase in profit margin and a significant rise in revenue was not in line with guiding principles. After the disclosure, the volume of trade had risen by 300%.
Not just this, the August 12 disclosure about an order win of Rs 115.5 crore from Beximcorp is also in question as the regulator said there is no such company in existence. The disclosure had led to an increase in price and volumes traded in the stock.
The resignation of the company secretary, followed by two independent directors and the CFO, puts the affairs of the company under a cloud of suspicion, the order noted.
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It also pointed out that the company had approved another findraise through rights issue of Rs 21 crore, approximately equal to the funds raised through IPO last February.
The noticees may, within 21 days from the date of receipt of this order, file their reply/objections, if any, to this order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard, the order said.
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