Sebi bars Seacoast Shipping promoters, orders impounding of Rs 84 cr
Source: Business Standard
The Securities and Exchange Board of India (Sebi) on Monday barred Seacoast Shipping Services’ (SSSL) chairperson and managing director, Manish Shah, and several others, including promoter entities, from the securities market until further orders for alleged manipulation of the books and several other violations.
The market regulator has directed Shah and six others to impound the illegal gains amounting to over Rs 84 crore and barred Seacoast from raising any money from the public.
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The market watchdog noted that the company misrepresented its financials, had fraudulent preferential allotments to the promoter entities, inflated revenues through fictitious transactions, covered up related party transactions, and diverted funds belonging to the company to related entities, among a slew of other findings.
Sebi has pointed out that even after significant capital raising in a short duration, there was nothing to show as the company’s assets, indicating that the funds raised were siphoned away to related entities.
“The shareholding of promoters in the company fell from a high of 73.97 per cent to the current holding of 0.04 per cent. No promoter would have any interest in running a company with such a low holding except to try his luck once again through a rights issue!” noted Sebi whole-time member Ashwani Bhatia in the interim order.
The stock exchange BSE has been directed not to approve any rights issue application filed by SSSL. The Sebi order has also directed the appointment of an audit committee by the company.
“The new audit committee is directed to have enhanced oversight of the financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient, and credible,” the order notes.
“The whole gamut of these murky affairs in the company does not leave much scope to think of any coincidence but conclude that this was a pre-planned and efficiently executed fraud on the securities market by the company and its promoters,” pointed out Bhatia.
First Published: Sep 30 2024 | 9:41 PM IST
