New Delhi, February 4 (PTI) – The Securities and Exchange Board of India (Sebi) has imposed fines totaling Rs 25 lakh on eight entities, including DB Realty (now Valor Estate), its promoters, and other officials, for breaching regulations related to financial misstatements and non-disclosures.
As per a Sebi order, fines of Rs 5 lakh each were levied on DB Realty Ltd, its promoter Vinod Kumar Goenka (Chairman and Managing Director), and Shahid Balwa Usman (promoter and Managing Director). In addition, Sebi imposed penalties of Rs 2 lakh each on other individuals involved, including Asif Yusuf Balwa, Jayvardhan Vinod Goenka, Salim Balwa Usman, Sunita Goenka, and Nabil Yusuf Patel.
The charges stem from DB Realty’s failure to comply with accounting standards when preparing and presenting financial statements related to a guarantee provided to the Bank of India (BOI) for a loan taken by Pune Buildtech Pvt Ltd (PBPL). This failure resulted in violations of listing and disclosure rules.
Sebi’s Chief General Manager, G Ramar, highlighted in the final order that crucial event-based disclosures, such as the classification of the loan as a non-performing asset (NPA), the invocation of the guarantee, the symbolic possession of properties, and the issuance of recall notices, were material information that should have been disclosed appropriately.
The order further stated that Vinod Goenka and Shahid Balwa Usman, as signatories to the financial statements and as those responsible for CEO/CFO certifications between fiscal years 2013-14 and 2014-15, failed to include critical details in the postal ballot notice. The notice misrepresented that the borrower company was meeting its loan repayment obligations and omitted essential disclosures about the guarantee and security provided for the loan.
Additionally, the duo did not report key events, such as the receipt of a notice under Section 13(2) of the SARFAESI Act, the invocation of the guarantee, and the symbolic possession of company properties by Bank of India, to the stock exchanges.
Sebi also found that Asif Yusuf Balwa, a promoter group member and one of the personal guarantors for the loan, was involved in signing the financial statements and certifications for FY 2017-18 to FY 2020-21, making the information presented therein misleading and non-compliant with Indian Accounting Standards (Ind AS 109).
Meanwhile, other non-executive directors—Jayvardhan Vinod Goenka, Salim Balwa Usman, Sunita Goenka, and Nabil Yusuf Patel—were found in violation of disclosure rules for FY 2013-14 and 2014-15.
The Sebi inquiry followed complaints in December 2020 alleging that PBPL had taken a Rs 225 crore loan from BOI in 2013, backed by a corporate guarantee from DB Realty and personal guarantees from Vinod Goenka, Shahid Balwa, and Asif Balwa. The complainant also alleged that the loan was misused to settle dues from other group companies, with the outstanding amount growing to around Rs 516 crore by June 2020.
PBPL is a wholly-owned subsidiary of Marine Drive Hospitality & Realty Pvt Ltd, formerly known as DB Hospitality.
Following the complaints, Sebi initiated an investigation covering the period from April 2013 to March 2021 to assess potential regulatory breaches.
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