SEBI finds ₹5.90 crore misused via inflated bills in Droneacharya case

It also addresses violations by associated intermediaries, including auditors and merchant bankers, for aiding these acts or failing in disclosure duties.

Who it concerns: Droneacharya Aerial Innovations Limited, Mr. Prateek Srivastava, Ms. Nikita Srivastava, Instafin Financial Advisors LLP, Mr. Sandeep Ghate, Mr. Kishan R Verma, Mr. Harshal Kher, Corporate Capital Ventures Private Ltd., Micro Infratech Pvt. Ltd., and Ms. Mukula Joshi.

What SEBI found or ordered

• SEBI found that DAIL and its promoters devised a fraudulent scheme involving the mis-utilization of IPO proceeds.
• SEBI found that DAIL misrepresented financial statements by inflating revenue and profit.
• SEBI found that DAIL failed to disclose quotations for software in the prospectus and omitted related party transactions.
• SEBI found that DAIL provided incorrect shareholding disclosures and failed to disclose the statement of deviation on the utilization of IPO funds for the half-year ended March 2024.
• SEBI found that Instafin Financial Advisors LLP and Mr. Sandeep Ghate aided and abetted the fraudulent scheme.
• SEBI found that Mr. Kishan R Verma issued unqualified audit reports despite significant discrepancies and issued a misleading certificate on the utilization of IPO funds.
• SEBI found that Corporate Capital Ventures Private Ltd. failed to disclose related party transactions in the prospectus.
• SEBI found that Micro Infratech Pvt. Ltd. aided the scheme by issuing fictitious or inflated bills to misutilize Rs. 5.90 Crore.
• SEBI found that Ms. Mukula Joshi made incorrect disclosures regarding promoter and public shareholding percentages.

Also in the document

• The investigation covered Financial Years 2022-23 and 2023-24.
• A specific amount of Rs. 5.90 Crore was identified as misutilized through fictitious or inflated bills issued by Micro Infratech Pvt. Ltd.
• The company's equity shares were listed on the BSE SME platform since December 23, 2022.