Markets regulator Sebi today ordered forensic audit of Jaisukh Dealers Ltd (JDL) after finding prima facie evidence of misrepresentation of financials by the company.
While calling for the forensic audit, the Securities and Exchange Board of India (Sebi) has lifted the trading restrictions imposed on the firm, which figures among 331 'suspected shell companies' under the regulator's scanner.
In an interim order, Sebi said the value of inventory of JDL is overstated by Rs 1.8 crores, "thus there is prima facie evidence that the company has misrepresented its financials".
"...failure on part of JDL to provide documentary support of its investments, its trade receivables, and its related party transactions despite specifically asking for the same indicates that there is prima facie suspicion of misuse of the books of accounts/funds including facilitation of accommodation entries," Sebi added.
The regulator has directed BSE to appoint a forensic auditor to verify any misuse of the books of accounts or funds of JDL as well as any misrepresentation including of financials and business of the firm.
"The trading in securities of JDL shall be reverted to the status as it stood prior to issuance of letter dated August 7, 2017 by Sebi," the regulator said.
Jaisukh Dealers Ltd is among the firms against whom Sebi initiated action on August 7 by ordering trading restrictions, following receipt of a list of 331 'suspected shell companies' from the government.
The ordered trade restrictions -- allowing trade only once a month and that too for only buy transactions with a 200 per cent security deposit -- were revoked in some cases a few days later following appeals filed by them with the Securities Appellate Tribunal, but Sebi was asked to continue with its probe and pass its orders expeditiously.
The firm has been given 30 days time to file its reply or objections to the interim order.
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