India’s Securities and Exchange Board of India (SEBI) has issued an ex-parte interim order against the promoters and associates of Darjeeling Industriies Limited. The order alleges a scheme involving circular funding, misuse of preferential issue proceeds, and suspected stock price manipulation.
SEBI’s 62-page interim order names ten noticees, including Managing Director Ashok Dilipkumar Jain, described as the alleged “mastermind” behind the arrangement. The regulator questions the operational presence of the listed company, noting discrepancies in its registered office addresses.
According to SEBI, Darjeeling Industriies raised Rs 11.76 crore through convertible warrants, with the regulator alleging that a significant portion of the funds was funded by Ashok Jain. The order raises doubts about the independence of the investors who subscribed to the warrants.
SEBI further alleges that the company transferred subscription money back to Ashok Jain, leading to circular funding through multiple entities. The regulator questions fund diversions to businesses unrelated to Darjeeling Industriies’ stated operations, raising concerns about the legitimacy of these transactions.
The order also highlights discrepancies in Darjeeling Industriies’ physical operations, with inspections revealing the company not operating from its disclosed offices. SEBI expressed urgency in its actions, imposing market restrictions on the noticees to prevent potential wrongful gains. The regulator emphasized that the interim findings are subject to further investigation and defense from the affected parties.
