Sebi order on Royal Orchid after getting show cause notice reply
Mumbai: The Securities and Exchange Board of India (Sebi) on Thursday said it will pass a final order on the Royal Orchid matter after hearing the hospitality firm. Sebi has requested a response from the company on the show cause notice it issued on 31 March.
On 31 March, Sebi in its ex-parte ad interim order questioned the company, its promoters, and chief financial officer for alleged misstatement of the company’s consolidated financial statements for the financial year 2021-22, which it claimed inflated profits by 167%. The regulator had asked them why the company its promoters and the key personnels should not be issued a show cause notice or directions for restraining them from accessing the securities market, associating with any listed company or registered intermediary and disgorgement of gains made from the sale of shares should not be issued against them.
While disposing of the matter Justice Tarun Agarwala held that, “We accordingly dispose of the appeal with a direction to the appellant to file a reply to the show cause notice in three weeks from today. The respondent (Sebi) to fix a date and the matter will then be heard by Sebi after giving an opportunity for a hearing.
The interim order will continue to operate until then." In the interim order, the company has been directed to file a report detailing the changes to the consolidated financial statements for FY 2021-22 and its impact. The report has to be certified by a peer-reviewed chartered accountant, other than the statutory auditor.
Aggrieved by the market regulator’s order the company challenged the ex-parte ad interim order before the Securities Appellate Tribunal. Last week, SAT stayed the effect and operation of Sebi’s interim order till 17
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