SEBI bans 10 entities including Bombay Dyeing, Ness Wadia for two years

Mumbai: Capital market regulator Securities and Exchange Board of India (SEBI) has ordered Bombay Dyeing and Manufacturing Company Limited and its promoter Nasli N. Wadia, Ness Wadia and Jehagir Wadia, 10 individuals-entities have been banned from entering the securities market for two years.

SEBI has taken this punitive action against all of them for their involvement in a fraudulent scheme by misrepresenting the company's financial information-financial statements. Among others, the ban included Scale Services Limited-a Wadia Group company, its directors D.S. Garat, N.H. Datanwala, Shailesh Karnik, A. Chandrasekaran and Durgesh Mehta who were Joint Managing Director and Chief Financial Officer of Bombay Dyeing. is included. These individuals-entities have been ordered to pay the penalty amount within 45 days from the date of SEBI's order.

SEBI conducted a detailed investigation into the affairs of Bombay Dyeing and Manufacturing Company Ltd. for the period from FY 2011-12 to FY 2018-19 on the basis of several complaints.

Sebi, in its investigation, found that these units, through the so-called sale of flats (by Bombay Dyeing to Scale Services) (through a memorandum of understanding or MoU) in the company's financial statements, recorded sales of Rs 2,492.94 crore and profit during the financial years 2011-12 to 2017-18. Rs.1302.20 crores were involved in a fraudulent scheme of misrepresentation.

For these violations SEBI Bombay Dying, Nasli n. Wadia, his sons Ness and Jehangir Mehta have been banned from securities markets for two years and SCAL and its directors have been banned for one year.

Among the fines imposed by SEBI, Bombay Dyeing Rs 2.25 crore, Nasli Wadia Rs 4 crore, Jehagir Wadia Rs 5 crore, Ness Wadia Rs 2 crore and Mehta Rs 50 lakh, Scale Rs 1 crore and other directors of Scale Rs 1 crore each. A fine of Rs.25 lakh has been imposed.