SEBI wraps Dhenu Buildcon on roundtripping charges

SEBI wraps Dhenu Buildcon on roundtripping charges SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days.

Key points

• SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days.
• SEBI pulled-up Dhebu Buildcon Infra Ltd., a former NBFC firm, for alleged round tripping of funds.
• While the ultimate original source of the amount remained unverified, the order observed, DBIL.
• Varshney additionally directed BSE that the two businesses that were part of the six that obtained preferential allotment be suspended.
• SEBI ordered that of the nine noticees, Dhenu Buildcon.

SEBI pulled-up Dhebu Buildcon Infra Ltd., a former NBFC firm, for alleged round tripping of funds. Photo Credit: Reuters.

Securities and Exchange Board of India (SEBI) pulled-up Dhebu Buildcon Infra Ltd., a former NBFC firm, for alleged round tripping of funds, and partially converting the unsecured loan into equity share through preferential allotment.

"The transactions under examination constituted a coordinated and interconnected arrangement involving round tripping of funds, creation of purported unsecured loan liabilities and subsequent conversion of a substantial portion of such liabilities into equity shares of DBIL, with Surendra Jain and Virendra Jain being key conspirators, " remarked whole time member Kamlesh Chandra Varshney in the interim order issued August 19.

SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days. It then applied concerning ₹840 crore into equity shares through preferential allotment which led to six entities acquiring 99.70% of DBIL's outstanding equities. An amount of regarding ₹25.05 crore was repeatedly routed through the network and returned to.

While the ultimate original source of the amount remained unverified, the order observed, DBIL. The six entities that were allotted the shares did not have any physical existence, the WTM wrote in the order.

SEBI ordered that of the nine noticees, Dhenu Buildcon. It is the firm, is barred from taking any direct corporate actions. Its owners and "key conspirators" Surendra Kumar Jain and Virendra Jain are barred from capital markets until further orders and the others are restrained from disposing off shares of DBIL held by them, directly or indirectly, in any manner whatsoever, until further order.

Mr. Varshney additionally directed BSE that the two businesses that were part of the six that obtained preferential allotment be suspended. As they had no physical existence, further, he directed that BSE and MSE take action on thirteen firms who are mentioned in the order.

In short, SEBI wraps Dhenu Buildcon on roundtripping charges is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.