SEBI imposed heavy fine on this steel company and its promoters, know what is the matter

According to the news, market regulator SEBI has imposed a total fine of Rs 12 lakh on Prabhu Steel Industries Limited (PSIL) and its promoters for violation of regulatory norms. In an order issued by the Securities and Exchange Board of India (SEBI), a fine of Rs 3 lakh each is being imposed on PSIL and its promoters Harish Gangaram Agarwal, Dinesh Gangaram Agarwal and Akshita Harish Agarwal. According to language news, along with this, SEBI directed to deposit this fine within 45 days.

Any company should avoid misrepresentation

According to the news, SEBI had received a review report from the National Financial Reporting Authority in the case of PSIL on February 14, 2022, which had mentioned serious lapses with respect to the accounting and auditing standards of the company. Subsequently, SEBI had investigated the misstatements in the financial statements of PSIL under the provisions of the Securities Contracts (Regulation) Act and Disclosure Rules. It found that PSIL had presented incorrect disclosures and financial statements for the financial year 2019-20. According to SEBI, any company should avoid misstatement in the financial statements and ensure that the annual report does not present a misleading picture.

PSIL failed in these matters

According to the SEBI order, PSIL also failed to assess loss provisions in respect of existing loans, advances and bank balances, recognition of sale of shares as revenue from operations, non-provision for depreciation on assets. This has resulted in misrepresentation of financial statements and given a false picture to investors. PSIL failed to comply with the rules and violated SCRA regulation and disclosure rules.

The regulator found that Harish Gangaram Agarwal was a whole-time director and Dinesh Gangaram Agarwal was the Chairman and MD and key managerial personnel of PSIL and had attended all the board meetings of the company during FY 2019-20. In addition, he has signed Form MGT-9 (Summary of Annual Returns), Management Discussion and Analysis Report, Corporate Governance Report, Balance Sheet, Profit and Loss Statement, Cash Flow Statement of the company.