Sebi bans SME firm Kalahridhaan Trendz, promoters from securities market within a year of listing

Sebi, the superior markets regulator, has banned SME institution Kalahridhaan Trendz and its promoters from the securities markets for flouting disclosure rules and misleading communications to banal exchanges.

Kalahridhaan Trendz Ltd (KTL) is listed connected the NSE's SME (cmall and mean enterprises) level Emerge.

Apart from KTL, the promoters -- Niranjan D Agarwal, Aditya N Agarwal, and Sunita Niranjan Agarwal -- were besides barred from trading until further orders, according to an interim order-cum-showcause announcement issued by the Sebi.

The Securities and Exchange Board of India (Sebi) besides directed KTL and its promoters to amusement origin arsenic to wherefore suitable directions of debarment should not beryllium issued against them.

Backgrounder

The bid came aft Sebi received definite complaints from HDFC Bank against KTL regarding default successful outgo of recognition paper dues. Thereafter, the markets watchdog initiated an introspection successful the substance to ascertain the usurpation of assorted Sebi rules.

The introspection was conducted from February 23, 2024 to December 15, 2024.

Sebi recovered that KTL is prima facie recovered to person failed to marque worldly disclosures regarding its default successful repayment of its dues to HDFC Bank.

Further, the institution (KTL) is prima facie recovered to person made mendacious and misleading firm announcements regarding its expansion/profitability and receipt of a ample bargain bid from a fictitious entity from Bangladesh, the regulator said.

In effect to regulatory enquiries regarding the same, it has tried to screen its way by fabricating email communications. The mendacious and misleading firm announcements positively affected the terms and trading measurement successful the scrip, it added.

Sebi noted that it appears that the KTL had made the firm announcements to overgarment a rosy representation of the prospects of the institution and to induce investors to commercialized successful the shares of the company.

By acting successful specified manner, Kalahridhaan Trendz Ltd has indulged successful fraudulent and unfair commercialized practices successful the securities market, the bid said.

Further, Sebi recovered that Niranjan, Aditya N Agarwal, and Sunitadevi Agarwal being the MD, the whole-time director, and a non-executive director, respectively, of KTL are besides liable for the violations/non-compliances.

The regulator besides observed that Gujarat-based Kalahridhaan Trendz has failed to name a compliance serviceman nether LODR (Listing Obligations and Disclosure Requirements) rules.

Additionally, Sebi alleged that the institution has made misleading firm announcements regarding assignment of autarkic manager and has contravened the disclosure norms.

These firm announcements by KTL person raised concerns that they were aimed astatine influencing investors to commercialized successful its shares.

There is simply a existent anticipation that the promoters, who are progressive successful this case, whitethorn commencement selling their shares and exit the company, leaving gullible investors successful the lurch, Sebi said.

Also, Kalahridhaan Trendz has approved different fund-raising program done a rights issue. Given the misleading statements, determination is simply a hazard that nationalist shareholders whitethorn beryllium tempted to put further successful KTL and endure losses successful the agelong run, it added.

With inputs from agencies