SEBI probes Kore Digital over IPO proceeds diversion and account manipulation

This is an interim order by SEBI regarding Kore Digital Limited and three individuals, examining prima facie evidence of misrepresentation of financial statements, manipulation of accounts, and diversion of IPO proceeds following the company's listing on the NSE SME platform.

Who it concerns: Kore Digital Limited, Ravindra Doshi, Chaitanya Doshi, Kashmira Doshi

What SEBI found or ordered

• SEBI observed a multifold increase in Revenue from Operations post-listing, with an average of 75% derived from subsidiaries.
• SEBI noted that three subsidiaries (Franken Telecom, Wolter Infratech, KDL RealInfra) were incorporated 6-9 months prior to acquisition and had no MCA filings for financial statements or auditor appointments.
• SEBI found that GST registrations for two of the subsidiaries were cancelled within one month of registration.
• SEBI noted that the statutory auditor (J N Gupta & Co.) failed to provide requisite information regarding the work of other auditors for the subsidiaries.
• SEBI identified 'step-down subsidiaries' (HBF, KDL, Golart) from which substantial revenue was booked, which were not mentioned in the audited financial statements of Kore.
• The order is interim, issued under Sections 11(1), 11(4), and 11B of the SEBI Act, 1992.

Also in the document

• The examination period covers April 1, 2023, to March 31, 2026.
• Revenue from Operations increased from INR 21.27 Crore in March 2023 to INR 408 Crore in March 2026.
• The order cites potential violations of the SEBI Act, LODR Regulations, and PFUTP Regulations.