The Securities and Exchange Board of India (SEBI) has imposed a fine of ₹25 lakh on DB Realty Ltd, now known as Valor Estate Ltd, along with seven individuals connected to the company. This penalty was issued for violations concerning financial misstatements and a lack of disclosures. The company failed to comply with accounting standards and did not properly disclose a corporate guarantee it provided to the Bank of India for Pune Buildtech Pvt Ltd (PBPL).
What Led to SEBI’s Action?
SEBI’s investigation found that DB Realty failed to adhere to accounting standards when preparing and presenting its financial statements, especially regarding a guarantee provided to the Bank of India for a loan taken by PBPL. This loan, which began in 2013, grew to ₹516 crore by June 2020. Significant events, including the loan being classified as a non-performing asset (NPA), the invocation of the guarantee, and the bank taking symbolic possession of properties, were not properly disclosed to the stock exchanges.
Who Are the Penalized Individuals?
The penalties include fines of ₹5 lakh each on DB Realty, its promoters Vinod Kumar Goenka (Chairperson and Managing Director) and Shahid Balwa Usman (Managing Director). Additionally, ₹2 lakh fines were imposed on Asif Yusuf Balwa, Jayvardhan Vinod Goenka, Salim Balwa Usman, Sunita Goenka, and Nabil Yusuf Patel. These individuals were found to have failed in disclosing material information and misrepresented the financial condition of PBPL in official communications.
