Friday, November 8, 2024
Home Business SME woes: Sebi flags fraud by 2 companies to pump up stock

SME woes: Sebi flags fraud by 2 companies to pump up stock

by
0 comment

A string of

accounting frauds

unearthed by

Sebi

this month poses another risk to the blistering rally in shares of small businesses. Varanium Cloud and Add-Shop E-Retail – both listed on the small and medium enterprises (SME) platform – were found to have manipulated their financial statements to fuel gains in their shares, according to initial orders issued by Sebi.

The authorities have banned both companies and their founders from dealing in the capital market.
The crackdown comes after the regulator issued warnings earlier this year of

price manipulation

in tiny IPOs. Analysts say the development presages greater

regulatory action

, which may temper further gains in the BSE SME IPO Index of micro listings that has soared more than 5,000% since the start of 2021.
“This is just the tip of the iceberg,” said Ambareesh Baliga, a market expert. “Fewer regulations were meant to attract good quality SMEs to the market… instead it has attracted the wrong ones.”
Technology firm Varanium Cloud was found to have misused funds raised from its public offering in 2022, and “manipulated its financial statements by recording fictitious sales and purchases”, Sebi said in its order dated May 10.

You may also like

Leave a Comment

About Us

Welcome to Janashakti.News, your trusted source for breaking news, insightful analysis, and captivating stories from around the globe. Whether you’re seeking updates on politics, technology, sports, entertainment, or beyond, we deliver timely and reliable coverage to keep you informed and engaged.

@2024 – All Right Reserved – Janashakti.news