SEBI investigates ₹14.15 crore fund diversion at Arcotech Ltd

This order addresses SEBI's investigation into Arcotech Limited and its directors regarding allegations of fund diversion, misrepresentation of financial statements, and failure to disclose material events such as the seizure of the company's registered office.

Who it concerns: Arcotech Limited, Mr. Radhanath Pattanayak, Mr. Arvind Kumar Saraf, Mr. Rishabh Saraf, Mr. Akshaya Kumar Biswal, Mr. Arvind Dadheech, Ms. Nidhi Jain, Sidhant Distributors Pvt. Ltd., Ms. Renu Saraf, Arcotech Info Ltd., Cloast Trade & Services Pvt. Ltd., Siddhivinayak Stockist & Trades Pvt. Ltd., Good Value Products Limited, and Nihon Sales Private Limited.

What SEBI found or ordered

• SEBI investigated potential misrepresentation in financial statements and diversion of funds for FY 2016-17 to 2020-21.
• Allegations include diversion of Rs. 14.15 crores to Sidhant Distributors Pvt. Ltd. for preferential share allotment.
• Allegations include fictitious and sham transactions with entities like Astor Mercantile Pvt. Ltd., Nihon Sales Pvt. Ltd., and Bharat Sales to inflate sales and purchases.
• Allegations include failure to disclose the seizure of Arcotech's registered office by IFCI Ltd. due to non-payment of dues.
• Allegations include delay in disclosing the reduction of promoter shareholding due to pledge invocation by IFCI Ltd.
• Personal hearings were conducted for the noticees between September and October 2025.
• The provided text contains the allegations and procedural history but does not state the final findings, penalties, or directions issued by SEBI.

Also in the document

• The investigation period covered Financial Years 2016-17 to 2020-21.
• The alleged fund diversion amount is specified as Rs. 14.15 crores.
• The text notes that the company's financial statements for the relevant years were audited by statutory auditors and filed with the MCA and stock exchanges without objection at the time.
• The provided document excerpt ends before the final adjudication or penalty section, so the outcome of the case is not included in this summary.