New Delhi, Mar 21 (PTI) Capital markets regulator Sebi on Monday barred Quest Financial Services Ltd (QSFL) and six individuals from the securities market for a period ranging from six months to one year as well as imposed penalties totalling Rs 76 lakh for various violations.
The directions passed against them through the final order is for fraudulent trading activities, misrepresentation in the books of accounts and violation of regulations.
QSFL and two individuals — Prakash Jajodia and Rabindra Hisaria — have been barred from the securities market for a one-year period.
The regulator imposed a fine of Rs 40 lakh on QSFL, Rs 15 lakh on Prakash Jajodia, Rs 9 lakh on Rabindra Hisaria and Rs 3 lakh each on Kishan Jajodia, Amit Jajodia, Bijay Kumar Agarwal and Jyoti Lohia.
Others have been barred for a six-month period.
Kishan Jajodia, Amit Jajodia and Jyoti Lohia were directors of QSFL during the financial year 2015-16 while Rabindra Hisaria was its Chief Financial Officer.
In an interim order in October 2017, Sebi had directed BSE to appoint an independent forensic auditor to verify the misrepresentations, including in financials/business of QSFL and misuse of funds/books of account.
However, it was found that QSFL failed to cooperate with the forensic auditor appointed by BSE on the directions of the regulator.
Also Kishan Jajodia, Amit Jajodia and Jyoti Lohia as the directors of QSFL failed to present true and fair financial statements, executed transactions which were non-genuine in nature resulting in misrepresentation of the accounts/financial statements and misused account/funds of the company, according to Sebi.
The promoters were responsible for the failure of the company to cooperate with the forensic auditor, the regulator noted.
Besides, Sebi observed that QSFL failed to give correct timely information about its business activity or any change in business activity to its shareholders/investors.
The company claimed to have been engaged in investment and loan business as a non-banking financial company but the 2015-16 annual report showed that it was engaged in asset management, projects and embroidery.
QSFL had kept the investors in the dark about the true nature of income of the firm from interests earned from loans or sale of infrastructure and Textile products or gain from investments, as per Sebi.
The watchdog noted that the misleading information with respect to its business activities and true nature of its income had the potential to mislead the investors was unfair. PTI HG MR
