SEBI orders Emami Realty over misclassification and related party transactions

This is an adjudication order by SEBI regarding Emami Realty Limited (ERL), examining alleged violations related to the non-disclosure of related party transactions, lack of prior audit committee approval for specific loans, and the misclassification of investments as inventories in financial statements for FY14 to FY25.

Who it concerns: Emami Realty Limited (formerly Emami Infrastructure Limited)

What SEBI found or ordered

• Alleged failure to disclose Emami Agrotech Limited (EAL) as a related party and report loans of ₹102.15 crore (FY14) and ₹78.20 crore (FY15).
• Alleged failure to disclose Add Albatross Properties Private Limited (AAPPL) as a related party and report deposits of ₹80 crore (FY14).
• Alleged failure to disclose Sanjeevani Vyapaar LLP (SVL) as a related party and report loans of ₹26.90 crore (FY15).
• Alleged violation of Regulation 23(2) of LODR Regulations for failing to obtain prior audit committee approval for a ₹25 lakh loan to Lohitka Property LLP in August 2016.
• Alleged misclassification of ₹49.94 crore in equity investments and debentures as 'Inventories' instead of 'Investments' in standalone financial statements for FY22 and FY23.
• Investigation period covers FY14 to FY25.

Also in the document

• The order notes that ERL was formerly known as Emami Infrastructure Limited and merged with two subsidiaries in July 2016.
• SEBI alleges that the misclassification of investments as inventories had the effect of inflating current assets in ERL's standalone financial statements.
• The alleged related party transactions involved significant amounts, including loans and deposits totaling over ₹200 crore across multiple entities.