Sebi orders forensic audit of Venmax Drugs and Pharmaceuticals

Sebi today ordered forensic audit of Venmax Drugs and Pharmaceuticals, which figures in the list of suspected shell companies, to check misuse of funds even as the regulator lifted trading curbs imposed on it.

Trading in the securities of Venmax Drugs and Pharmaceuticals (VDPL) would be reverted to the status prior to August 7, when the curbs were imposed, Securities and Exchange Board of India (Sebi) said in an interim order.

"On account of the prima facie observations regarding misuse of books of accounts/funds by VDPL and the suspicion regarding misrepresentation of its financials, it is also imperative that in the interest of investors, the financials of the company be independently audited to establish their genuineness," the regulator noted.
 

Accordingly, Sebi has directed the exchange to appoint an independent forensic auditor to verify any misrepresentation of financials and business of VDPL as well as any misuse of the funds or books of accounts.

Shares held by VDPL's promoters and directors should not be allowed to be transferred for sale by depositories, the order said.

VDPL is among the firms against whom Sebi initiated action on August 7 by ordering trading restrictions after it received the list of 331 'suspected shell companies' from the government.

The trading 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 the companies with the Securities Appellate Tribunal, but Sebi was asked to continue with its probe and pass its orders expeditiously.