The Securities and Exchange Board of India (SEBI) uncovered that Seya Industries siphoned off ₹81.26 crore over three financial years — FY19, FY20, and FY21 — through shell companies linked to the promoter group. The funds were rerouted under the guise of fake sales and purchases to entities such as Whiz Enterprises, Aneeka Universal, and Shri Balaji Entertainments, all controlled privately by Ashok Rajani and family.
SEBI found these transactions were not disclosed as related party transactions, directly violating Listing Obligations and Disclosure Requirements (LODR) and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations. The diversion and the manipulation of accounts were compounded by misrepresented financials, leading to inflated revenue and profit figures in FY19 and FY20.
Ernst & Young, appointed for a forensic audit, corroborated the financial manipulation after Seya Industries failed to cooperate with NSE queries. The fraud came to light following complaints from SC India Fund Manager in 2020 and 2021, alleging private placements based on doctored books.
Penalties and Market Bans on Top Management
SEBI imposed the following monetary penalties:
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₹28 crore each on Ashok Ghanshyamdas Rajani (CMD) and Amrit Rajani (CFO)
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₹2 crore on Asit Kumar Bhowmik (Executive Director)
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₹50 lakh on Sivaprasada Rao Buddi (Executive Director)
In addition to the financial penalty, SEBI has barred all four officials from:
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Participating in securities markets for five years
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Holding positions as director or key managerial personnel (KMP) in any listed entity or SEBI-registered intermediary for the same period
SEBI has also directed Amrit Rajani to recover and return the siphoned amount of ₹81.26 crore to Seya Industries within six months, along with 12% interest per annum from the date of the original diversion.
“The senior executives actively participated in concealing the fraud and compromised their fiduciary responsibilities,” said SEBI Whole Time Member Ananth Narayan G.
Company Under Insolvency; Further Orders Pending
While the individuals have been penalized, SEBI refrained from passing orders against Seya Industries itself at this stage due to ongoing insolvency proceedings and the moratorium under the Insolvency and Bankruptcy Code (IBC). However, the regulator noted that separate proceedings against the company are underway and a final order will be passed in due course.
The case highlights systemic governance lapses in listed companies and underscores SEBI’s aggressive stance on enforcing financial transparency and penalizing false disclosures, insider trading, and misuse of investor capital.