Market regulator SEBI's action on SME for manipulating financials

The Securities and Exchange Board of India (SEBI) on Monday barred 12 entities, including the listed firm Add-Shop E-Retail and several members of the promoter-management team, from the securities market for allegedly manipulating financial statements.

According to the SEBI order, the company was involved in fictitious transactions and made fake sales and purchase entries in its accounts. More than 46 per cent of the sales over the past three financial years were found to be fictitious. Additionally, there were significant related-party transactions that did not receive audit committee approval.

The company was listed on BSE's small and medium enterprise (SME) platform in September 2018 and moved to the exchange s main board platform in October 2020. The promoter stake in the company fell to 27.2 per cent in December 2023, compared to 62.99 per cent in April 2020.

This order comes at a time when SMEs have been under scrutiny for manipulation and are being monitored more closely due to concerns over fraudulent practices.

www.business-standard.com dt. 07.05.2024