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A. "Misrepresentation including of financials and misuse of funds/books of accounts in violation of LODR Regulations, 2015; B. Non furnishing of information/Non- cooperation by the Company with the forensic auditor;

C. Other violations of LODR Regulations, 2015.

D. Violation of PFUTP Regulations, 2003."

6. The WTM after considering the replies of the appellants and the material evidence on record concluded that the appellant Company misrepresented its financials and violated the accounting standards. The WTM found that various provisions of LODR Regulations were not complied with during the three financial years and there were lapses on the part of the Company in not making the disclosures within the stipulated period. The WTM further found that non- furnishing of information to the forensic auditor was violative of Section 11(2)(i) of the SEBI Act. The WTM further found that there was no violation of Section 12A of the SEBI Act and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as „PFUTP Regulations‟) as there was no misappropriation of the funds nor the Company nor its Directors had played a fraud upon the investors nor was there any disproportionate gain or unfair advantage nor any specific loss was incurred by any investor. The WTM accordingly for the above violations debarred the appellant from accessing the securities market for specified periods and imposed different amounts of penalties on the appellants.

9. The WTM has gone into detail and came to the conclusion that there has been misrepresentation including of financials and, consequently, violation of the LODR Regulations. In this regard, the WTM found discrepancies relating to loans and advances, not deploying appropriate selection process, discrepancies between trade receivable and revenue, making investment in companies which had nil revenue, discrepancies in computation of preliminary expenses. The WTM found that the findings given in the forensic audit report were correct and the Company had disclosed false transactions in the books of accounts and thereby violated Regulation 48 of the LODR Regulations, 2015. The discrepancies found by the WTM is as under:

v. DIDL has disclosed suspicious transactions in its books of accounts with respect to transferring of funds amounting to Rs.734 lakhs to 8 different parties, on the same day of receipt of funds amounting to Rs.733.9 lakhs."

10. We thus find that the Company had made certain lapses and failed to comply with the LODR Regulations.

11. We also find that the entire enquiry was initiated with regard to the allegation that the Company was a shell Company which fact was found to be false. Further, the WTM has given a clear finding that there was no violation of the PUTP Regulations and there was no diversion of funds nor there was any manipulation in the price of the scrip and, consequently, no fraud or unfair advantage was caused to any shareholder or investor. In the absence of any specific loss being caused to anyone it was contended that the penalty imposed in the given circumstances was totally disproportionate to the alleged violation apart from being harsh and excessive.

14. In the instant case, we find that the violation of the LODR Regulations gave no disproportionate gain to anyone nor created any unfair advantage to the appellant nor any specific loss was caused to any investors and, therefore, in our opinion the direction of debarment and penalty imposed for violation of the LODR Regulations appears to be harsh and excessive.

15. Accordingly, while affirming the violation committed by the Company with regard to non- compliance of the LODR Regulation, we direct that the period undergone towards debarment of the appellants is sufficient for the aforesaid violations and, consequently, the period is reduced to the period underwent by the appellants. In addition to the aforesaid, we reduce the penalty to 50% of the amount imposed against the appellants. The appeals are partly allowed. All the misc. applications are also accordingly disposed of. In the circumstances of the case, parties shall bear their own costs.