SEBI bars Darjeeling Industriies promoters, alleges circular funding and stock manipulation scheme

The other noticees are Viha Ashok Jain, Dilip Sanklecha, Sonali Parmar, Abhishek Prakash Jain, Kirti Ravi Kothari, Kalidas Magar, Joy Banerjee, Punyah Sachin Jain and director Pradeep Sutodiya. The regulator emphasised that its findings are prima facie and subject to further investigation as well as responses from the noticees.

According to SEBI, Darjeeling Industriies raised Rs 11.76 crore through the allotment of convertible warrants to ten non-promoter investors. While the investors initially subscribed Rs 2.94 crore, the regulator alleged that at least Rs 1.71 crore, or more than 58 per cent of the amount, was directly or indirectly funded by Ashok Jain through his family members and connected entities. SEBI said this raised serious doubts about whether the allottees were genuinely independent investors.

The regulator further alleged that soon after receiving the subscription money, Darjeeling Industriies transferred the entire Rs 2.94 crore to Ashok Jain. The funds allegedly returned to the company before being routed through multiple entities in a series of transactions that SEBI described as circular funding.

According to the order, a substantial portion of the money was diverted to businesses with no apparent connection to Darjeeling Industriies' stated agricultural trading business. SEBI questioned payments of around Rs 3.09 crore to baby-care products manufacturer Lifeway Hygiene LLP, about Rs 1 crore to scrap recycler Shree Adhyashakti Metals Pvt. Ltd., more than Rs 1.28 crore to Antala Industries, Rs 40 lakh to Le Lavoir Ltd., where Ashok Jain is also a director, and another Rs 40 lakh to newly incorporated Ghantiram Foods. Investigators said a significant portion of the funds transferred to Ghantiram Foods was withdrawn in cash shortly after receipt.

SEBI also cast doubt on the company's physical operations. During inspections, investigators found that Darjeeling Industriies was not operating from its disclosed Mumbai registered office, which was occupied by an unrelated finance company that had purchased the premises earlier. Despite this, the company continued to disclose the address for board meetings. A visit to its declared Rajkot office found the premises locked, with no signage or evidence of business activity. The regulator further noted that the company's disclosed website was non-functional.

The order also drew on evidence recovered during a separate investigation involving Surendra Jain, who is being probed in the Sunshine Capital case. SEBI said WhatsApp conversations allegedly linked Ashok Jain with Surendra Jain and included discussions relating to Darjeeling Industriies, shareholder lists, company expenses and market operations. The regulator said these chats, when read alongside the fund trail and trading patterns, pointed to a coordinated arrangement to manipulate the company's shares.

SEBI said it acted urgently because the lock-in period for a substantial portion of the preferentially allotted shares was due to expire on June 30. The regulator expressed concern that the noticees could have sold their holdings and booked alleged wrongful gains at the expense of public investors. It estimated that shares held by Ashok Dilipkumar Jain and connected entities could have fetched as much as Rs 29.05 crore at prevailing market prices.

Pending completion of its investigation, SEBI has imposed immediate market restrictions on the noticees. The regulator reiterated that the findings in the interim order are preliminary and that the affected parties will have an opportunity to present their defence before any final decision is taken.

--IANS