Sebi bans Manpasand Beverages, 3 top officials from market for 3 years

New Delhi: Markets regulator Sebi has barred Manpasand Beverages Ltd (MBL) and its three top officials from the securities markets for three years and imposed a penalty totalling Rs 68 lakh on them for manipulating and mis-stating the company's financial statement.

In its order, the regulator said that the financial statements of the company were manipulated and mis-stated for financial years 2018-19 and 2019-20.

Apart from Manpasand Beverages, those restrained by Sebi are— the company's promoter, chairman & managing director (CMD) Dhirendra Singh,  promoter and executive director Abhishek Singh and chief financial officer (CFO) Paresh Thakkar.

Also, these four entities have been fined Rs 17 lakh each, which needs to be paid within 45 days, Sebi said in its 55-page order passed on Tuesday.

Additionally, Dhirendra Singh, Abhishek Singh and Paresh Thakkar have been prohibited from holding position of director or key managerial personnel in any listed public company or any intermediary registered with Sebi in any capacity for five years.

Further, the company's former independent directors— Milind Babar and Chirag Doshi were fined Rs 2 lakh each and current independent directors --Nishish Mobar and Bharti Naik were fined Rs 1 lakh each.  Naik was non-executive director at the relevant time.

After receiving complaints in September 2019 from Bipin Rathod, who was the chairman of the audit committee of MBL, Sebi conducted an investigation into the matter to ascertain any possible manipulation or misrepresentation in the books of accounts of MBL.

Also, Sebi appointed Chokshi & Chokshi LLP to conduct a forensic audit of the company's financial statements for 2018-19 and 2019-20.

In the report submitted to Sebi, the auditor pointed out various irregularities in the financial statements, which include purchases made from unregistered dealers without making payments; over-statement of purchases and sales, transactions with parties who had not filed GST returns making such transactions suspect; sales to suspicious entities,  overstatement of impairments, receivables and fixed asset.

"The financial statements of MBL for 2018-19 and 2019-20 were manipulated and the figures contained therein were significantly mis-stated...This led to publication of manipulated, untrue and misleading financial results of the company during 2018-19 and 2019-20, which presented a false picture of the financial health of the company to investors," Sebi Whole Time Member Ashwani Bhatia said.

Sebi also noted that the manipulations in MBL had started prior to the investigation period, as the company was found to have mis-utilized proceeds of a Qualified Institutional Placement (QIP) done by it in September 2016. This was established by a Sebi's order passed on March 2, 2023.

Also, the regulator, in its order, had found that MBL had deficiencies in internal controls and had published misleading financial statements for 2016-17 and 2017-18.

Since these facts were not part of the present proceedings, the regulator has not taken them into consideration while deciding on the allegations against the entities.