Omaxe Faces 2-Year Market Ban Over Financial Misreporting

Shares of Omaxe dropped 5% after Sebi barred the real estate firm and key executives from the securities market for two years due to financial statement irregularities. The penalties also include bans on holding director roles in other listed companies, with fines totaling Rs 47 lakh on 16 entities.

Shares of Omaxe plunged by 5% on Wednesday following Sebi's decision to bar the real estate firm and its key executives from the securities market for two years, citing financial irregularities.

The company's stock price dropped to its lower circuit limit, hitting Rs 152.20 on the BSE and falling to Rs 154.19 on the NSE.

The 30-share BSE Sensex climbed 259.06 points to 81,715.36 points, while the NSE Nifty rose 44.40 points to 24,901.70.

The Securities and Exchange Board of India (Sebi) announced the ban on Omaxe, its Chairman Rohtas Goel, MD Mohit Goel, and three others due to fraudulent financial reporting.

Individuals barred include Sudhangshu S Biswal, Arun Kumar Pandey, and Vimal Gupta, who are also prohibited from holding directorial or key managerial roles in any listed company for two years.

Sebi fined 16 entities, including the accused individuals, a total of Rs 47 lakh. The penalties range from Rs 1 lakh to Rs 7 lakh.

According to Sebi, the banned entities engaged in a coordinated scheme to manipulate Omaxe's financial statements, misrepresenting revenue, debtors, advances, and expenses from 2018 to 2021.

The misrepresentation in financial statements was intended to maintain the stock price, and therefore the value of the collateral, misleading investors and shareholders.

A forensic audit triggered by a complaint that accused Omaxe of fraudulent transactions, fund siphoning, and turnover inflation led to Sebi's scrutiny of the company's books from April 2018 to March 2021.

Consequently, Sebi prohibited Omaxe and involved parties from accessing or dealing in the securities market, either directly or indirectly, for two years.

(With inputs from agencies.)