India’s securities market regulator has barred two individuals linked to Dhenu Buildcon Infra from the securities market after alleging that a fabricated loan scheme was used to inflate the company’s market value by more than 1,600 times. The Securities and Exchange Board of India said in an interim order that Surendra Kumar Jain and Virendra Jain were connected to a network of entities through which funds were allegedly circulated to create the appearance of substantial loans.
According to SEBI, about ₹25 crore was circulated through bank accounts of connected entities that were owned or controlled by the identified individuals. The regulator alleged that this circulation was used to simulate loans worth ₹100 crore to Dhenu Buildcon.
The regulator also barred Dhenu Buildcon from undertaking corporate actions, including bonus issues, rights issues and dividend payments.
₹25 Crore Allegedly Used to Simulate ₹100 Crore in Loans
SEBI said Dhenu Buildcon, a non-banking financial company, purportedly obtained the simulated loan amount from seven entities.
Among the entities named in the regulator’s findings were Golkonda Aluminium Extrusions and Tiaan Consumer. SEBI alleged that the companies involved were directly or indirectly owned, controlled or managed by Surendra Kumar Jain and Virendra Jain.
The regulator said links among the entities were reflected through common addresses, directors, authorised signatories and cross-shareholdings.
According to SEBI, the movement of funds through the connected bank accounts created the appearance that Dhenu Buildcon had received loans substantially larger than the amount actually being circulated.
₹84 Crore of Debt Converted Into Equity
SEBI said Dhenu Buildcon subsequently converted ₹84 crore of the purported debt into equity through a preferential allotment to six of the entities.
The regulator described the loan-to-equity conversion as fabricated and said it played a significant role in the sharp increase in the company’s market capitalisation.
The interim order alleges that the underlying transactions did not reflect genuine lending activity of the scale presented through the company’s financial arrangements.
By tracing common ownership, management links, addresses and authorised signatories, SEBI concluded that the entities involved were connected to the two individuals who have now been barred from the securities market.
Market Capitalisation Rose From ₹3 Crore to ₹492.5 Crore
SEBI said Dhenu Buildcon’s market capitalisation increased to about ₹492.5 crore from roughly ₹3 crore following the alleged loan-to-equity conversion.
The increase represented a rise of more than 1,600 times, according to the regulator, despite negligible changes in the company’s revenue or profitability.
The regulator attributed the extraordinary increase in valuation to the alleged fabricated financial arrangement involving the connected entities and preferential allotment.
The interim measures now restrict Surendra Kumar Jain and Virendra Jain from participating in the securities market, while Dhenu Buildcon has been prevented from carrying out corporate actions such as bonus issues, rights issues or dividend payments.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
