 "Market regulator Sebi bars Kalahridhaan Trendz from securities market")
The Securities and Exchange Board of India (Sebi) on Friday barred Kalahridhaan Trendz, its managing director Niranjan D Agarwal, and two others from the securities market for alleged lapses in material disclosures and misleading information given through the stock exchange filings.
Sebi conducted an inspection on the small and medium enterprise (SME) listed on the NSE’s SME exchange after HDFC Bank filed a complaint for default of loan repayment. The company has not made any disclosure on the default, noted the interim order cum show-cause notice. It has also been alleged that the company made wrong disclosures on expansions. Despite the claim of planning to expand production, anticipating a 25 per cent increase in profit, the company failed to provide specific details of the orders, timelines, and investments required to justify the announcement.
The company also claimed to have received an order worth Rs 115 crore from Bangladeshi firm Beximcorp Textiles, but no such company was found in the database. Another conglomerate with a similar name in the textile business in Bangladesh declined having signed any contract with the Indian SME.
Sebi alleged that the company deliberately provided incorrect details to mislead the regulator. It also added that misleading disclosures were given to influence the price and induce investors. The regulator noted that interim directions were necessary as the company had approved another fundraising through rights issues of Rs 21 crore — nearly equal to the funds raised by the company through its SME IPO in February 2024.
“There is a risk that if further fundraising is not stopped, the public shareholders, lured by the false and misleading corporate announcements made by the company in the recent past, may be tempted to invest further in the company and suffer losses in the long run,” notes the order.
Sebi said that as the promoter lock-in in the firm ends on February 23, 2025, the promoters may start selling their shares and exit the company, “leaving gullible investors in the lurch”.