SEBI bars Bombay Dyeing, Ness Wadia, others from securities market for up to two years; imposes fines of ₹15.75 crore

Others banned and penalised by the SEBI are — Scal Services Limited, a Wadia Group company, its then directors D. S. Gagrat, N. H. Datanwala Shailesh Karnik, R.  Chandrasekharan and Durgesh Mehta, who was joint managing director and chief financial officer of Bombay Dyeing.

Securities and Exchange Board of India (SEBI) has barred 10 entities, including Bombay Dyeing & Manufacturing Company Limited and its promoters — Nusli N Wadia, Ness Wadia and Jehangir Wadia — from the securities markets for up to two years and levied a fine totalling ₹15.75 crore on them for being involved in a fraudulent scheme of misrepresenting the company's financial statements.

Others banned and penalised by the SEBI are — Scal Services Limited, a Wadia Group company, its then directors D. S. Gagrat, N. H. Datanwala Shailesh Karnik, R.  Chandrasekharan and Durgesh Mehta, who was joint managing director and chief financial officer of Bombay Dyeing.

 They have been directed to pay the penalty within 45 days, the SEBI said in its Order passed on October 21.

On the basis of certain complaints, SEBI conducted a detailed investigation into the affairs of Bombay Dyeing and Manufacturing Company Limited (BDMCL) for the period covering FY 2011-12 to FY 2018-19.

In its probe, SEBI found that these entities were involved in a fraudulent scheme of misrepresentation of financial statements of BDMCL, by inflating sales of ₹2,492.94 crore and profit of ₹1,302.20 crore arising from the alleged sale of flats (through memoranda of understanding or MoUs) by BDMCL to Scal during FY 2011-12 to 2017-18.

The regulator noted that the shareholding structure of Scal was deliberately designed in such a manner that though BDMCL directly held only 19% stake, through its indirect holdings in other shareholders of Scal, BDMCL was able to exercise complete control over the entire share capital of Scal.