SEBI finds Seacoast Shipping misrepresented financials in 4 fiscal years

This is a final order by SEBI regarding Seacoast Shipping Services Limited (SSSL) and 21 associated individuals and entities, addressing findings of financial misrepresentation, fraudulent preferential allotment of shares, and diversion of company funds between April 2020 and December 2023.

Who it concerns: Seacoast Shipping Services Limited, Manish Shah, Sameer Shah, Rakesh Shah, Parasmal Kundanmal Shah, Parasmal Kundanmal Shah HUF, CSB Projects Private Limited, Credo Holdings Private Limited, Deep Shah, Shail Shah, Cheryl Shah, Sushil Sanjot, Vipul Momaya, Jaydeep Shah, Apurv Patel, Viren Makwana, Shivangi Gajjar, Ankita Soni, Parin Shah, Parth A Patel, Pawansut Swami, and Vinay Kumar Jain.

What SEBI found or ordered

• SEBI found that SSSL misrepresented financial statements during FY 2020-21, FY 2021-22, FY 2022-23, and the period from April 1, 2023, to December 31, 2023.
• SEBI found that more than 85% of sales and more than 98% of assets held by the Company during the last three years of the investigation period appeared fictitious.
• SEBI identified fraudulent preferential allotment and divestment of stakes by both Promoters and Non-Promoters.
• SEBI found that SSSL diverted funds.
• SEBI noted that the number of outstanding equity shares increased almost 240 times from March 31, 2020, to September 25, 2024.
• SEBI noted that Promoter shareholding reduced from 73.97% to 0.04% while the number of public shareholders reached 2,49,756.
• The order includes directions regarding the impounding of unlawful gains and restraints on raising money from the public or dealing in securities, as detailed in the full text.

Also in the document

• The investigation period covered April 1, 2020, to December 31, 2023.
• The company was previously known as Mahaan Impex Limited.
• The order references a prior Interim Order cum Show Cause Notice dated September 30, 2024.
• SEBI noted that the company's business shifted to agro products, which are exempt from GST, making it difficult to establish the genuineness of transactions.