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Sebi has barred EKI Energy Services Ltd for two months and its Managing Director and founder Manish Kumar Dabkara for 12 months for misrepresenting the carbon credit firm’s financial statements, in a 94-page final order dated October 30.
Markets regulator Sebi has barred EKI Energy Services Ltd and its Managing Director Manish Kumar Dabkara from the securities market for misrepresenting the carbon credit trading firm’s financial statements. The company has been barred for two months and Dabkara for 12 months.
Sebi also imposed monetary penalties totalling Rs 88 lakh on the company and other individuals for violations of securities market rules, according to a 94-page final order dated October 30.
What Sebi found
The regulator said EKI had prematurely recognised revenue of Rs 197.04 crore during the first three quarters of FY23, giving investors a misleading picture of its financial performance. It described the continued disclosure of that revenue as “reckless financial misrepresentation” connected with investor decisions on the company’s shares.
Sebi also found that EKI had overstated expenses by Rs 26.34 crore across FY22 and FY23, which understated its profits. The order said the company diverted Rs 26.34 crore through those inflated expenses.
Who has been penalised
Sebi fined EKI Rs 12 lakh and Dabkara Rs 28 lakh. Whole-time director Naveen Sharma was fined Rs 13 lakh and barred for five months, while fellow whole-time director Sonali Sheikh was fined Rs 6 lakh and barred for one month. Former chief financial officer Mohit Kumar Agarwal was fined Rs 19 lakh and restrained from the market for eight months.
Bloomberg reported that lesser penalties were imposed on seven others, including three former executive directors who face market bans ranging from one to eight months.
Recovery directed
Sebi directed Dabkara, the company’s founder, to take immediate steps to recover the diverted amount.
EKI Energy, a carbon credit project developer and trader, drew scrutiny after auditors flagged how it recognised customer revenue and its profits fell sharply. The stock crashed at the time.
During the bar, those named cannot access the securities market or deal in securities. The company has not yet commented on the order, and it can appeal to the Securities Appellate Tribunal.
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