NEW DELHI, July 30 (PTI): The Securities and Exchange Board of India (SEBI) issued a final order against Excel Realty N Infra Limited and its related individuals (Noticees) under various sections and regulations of the SEBI Act, 1992. The matter pertains to the period from April 1, 2016, to March 31, 2021. SEBI conducted an examination based on a complaint and issued a show cause notice to the Noticees for alleged violations.
The Noticees are accused of continuously showing the balance outstanding from struck-off and defaulter companies in their financial statements. The Noticees invested in properties of certain companies struck off or declared default by the Ministry of Corporate Affairs (MCA), and these investments were not properly disclosed. Additionally, the Noticees did not provide for the provisioning or write-off of these investments, which allegedly led to the misstatement of financial results and misled investors.
Misuse of funds and non-provisioning for long outstanding loans and advances: The Noticees are accused of misusing funds and failing to provision for long outstanding balances of loans and advances for nine years.
This action was taken due to their involvement in a fraudulent scheme, wherein they misrepresented the financial statements of Excel Realty N Infra. They have been prohibited from participating in the securities market for a period of up to two years and have been fined a total of Rs 1.75 crore.
The entities barred by SEBI are the promoters of Excel Realty N Infra, namely Lakhmendra Chamanlal Khurana (who served as chairman & MD of Excel), Ranjana Khurana Lakhmendra, and Arpit Lakhmendra Khurana. Additionally, Pramod Yeshwant Kokate, the former chief financial officer (CFO) of Excel, is also among the barred entities.
SEBI’s investigation was initiated based on a complaint, and it covered the period from April 2016 to March 2021. The examination revealed that certain transactions executed by Excel with 24 seller parties, amounting to approximately Rs 119 crore and constituting around 66% of the company’s total assets during FY 2016-17 to 2020-21, were misrepresented in the firm’s balance sheet.
Lakhmendra Chamanlal Khurana, as the chairman and managing director during the relevant period, was found responsible for the management and financial decisions made on behalf of Excel. Ranjana and Arpit, as whole-time directors, approved the financial statements during this period. Thus, SEBI held them accountable for the violations that occurred while the Khuranas were in charge.
Furthermore, SEBI found that Pramod Yeshwant Kokate, the CFO of Excel, issued false certificates certifying the accuracy of the financial statements to facilitate the fraudulent disclosure scheme orchestrated by the Khuranas.
The violations committed by Lakhmendra, Ranjana, Arpit, and Kokate were deemed to be in breach of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules and disclosure norms.
As part of its order, SEBI instructed Excel to take the necessary steps to recover the outstanding balance of funds from its WOS within one year. Additionally, SEBI imposed specific sanctions on each individual involved: Lakhmendra Khurana was barred from the securities market for two years and from serving as a director or key managerial personnel in any listed company for one year. Ranjana, Arpit, and Kokate were banned from accessing the market for one year, and Excel Realty N Infra itself was barred for six months.
In terms of financial penalties, SEBI levied fines of Rs 1 crore on Lakhmendra Chamanlal Khurana, Rs 25 lakh each on Ranjana and Arpit, Rs 15 lakh on Kokate, and Rs 10 lakh on Excel Realty N Infra.
