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Market regulator SEBI has directed the stock exchanges to appoint an independent auditor to conduct forensic audit of J Kumar Infra Projects.
On Friday, the Securities and Exchange Board of India had directed the bourses to appoint an independent auditor to “further verify misrepresentation including of financial and/or business activities of J Kumar Infra”.
In the interim order, SEBI has also asked the bourses to look into the role of key management personnel, directors and promoters.
Besides, SEBI said it doubts the authenticity of the documents submitted by J Kumar with regard to PACL. PACL, which had raised money from the public in the name of agriculture and real estate businesses, is already under SEBI investigation. The regulator found that PACL mobilised crore of rupees through collective investment schemes.
Accordingly, it asked the auditor to look into the misuse of the books of accounts including facilitation and accommodation entries or compromise of minority shareholder interest with respect to its agreement with PACL.
The market regulator has given 30 days to J Kumar Infra to respond to the interim order.
In a notice to the exchanges, the company on Monday said: “All the documents which were asked by SEBI were duly provided by the company except certain documents which were more than eight years old and so were not in possession of the company.”
The order will not have any consequence or embargo on the liquidity of the trading of the company on the stock exchange, it further said. “As has been recorded in the order, the NSE has also submitted a positive representation to SEBI stating that the company is compliant with LODR Regulations and the company’s share should be allowed to be traded on its platform,” it added.
The company is taking legal advice in the matter and the management is ‘confident that findings of the order will be set aside’ upon proper appreciation of the facts and circumstances by SEBI.
However, shares of J Kumar Infra Projects on Monday plunged, hitting the lower 20 per cent circuit on the stock exchanges. The stock closed at ₹162.6 on the NSE and ₹164.4 on the BSE.
For the first quarter of the current fiscal, the company had reported a net profit of ₹40.19 crore, a rise of 55.65 per cent over the year-ago comparable quarter, and turnover of ₹618.42 crore, a growth of 65 per cent.
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