Sebi orders forensic audit of two more companies

PTI New Delhi | Updated on January 08, 2018 Published on October 15, 2017


Markets regulator Sebi has ordered forensic audit of two companies, Jalan Cement Works and Ritman Infra, after finding prima facie evidence of misrepresentation of financials by them.

While calling for the forensic audit, the Securities and Exchange Board of India (Sebi) has lifted the trading restrictions imposed on the companies, which figure among 331 ‘suspected shell companies’ under the regulator’s scanner.

In two separate interim orders, dated October 13, the watchdog has ordered appointment of independent forensic auditors to verify any misuse of the books of accounts or funds as well as any misrepresentation including of financials and business of the firms.

With regard to Jalan Cement Works, Sebi said that the company’s income, investments, inventories, loans and advances are all having significant transactions with connected or related parties for which the firm has failed to provide adequate documentary support.

“Thus, there is prima facie suspicion of misuse of funds/books of accounts of the company as well as of misrepresentation of business/financials,” Sebi said.

In the ruling related to Ritman Infra, Sebi said in view of the prima facie observations regarding misrepresentation of financials by the firm and the suspicion regarding misuse of books of accounts/funds, “the persons who are in control of the company and the directors of the company are prima facie liable for action by Sebi”.

The Sebi has given 30 days time to the two companies for filing their reply or objections to the interim order.

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Published on October 15, 2017
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