Sebi Settles Blue Coast Hotels Disclosure Violation Case

Blue Coast Hotels and its promoter resolved a dispute with the Securities and Exchange Board of India (Sebi) over disclosure violations, by paying Rs 89.3 lakh in settlement charges. The case involved non-disclosure of a Rs 318.95 crore liability linked to a failed project and breaches of accounting standards.

Blue Coast Hotels and its promoter, Kushal Suri, have resolved a case of alleged disclosure violations with the Securities and Exchange Board of India (Sebi), agreeing to pay Rs 89.3 lakh in settlement charges. The settlement, announced on Wednesday, came after the submission of a proposal by the hotel chain and its director, seeking to resolve the proceedings without admitting or denying the alleged findings.

According to the order, an investigation by the National Stock Exchange (NSE) uncovered several discrepancies in the financial disclosures of Blue Coast Hotels from FY19 to FY22. Sebi's examination found that the company failed to disclose a substantial contingent liability of Rs 318.95 crore, related to a refund to space buyers in a failed Aerocity project.

The liability, which was ordered for disclosure in a 2018 Delhi High Court ruling, was recorded only in the company's FY23 financials, in breach of Sebi's Listing Obligations and Disclosure Requirements (LODR) rules. The settlement concludes the legal proceedings but leaves open the possibility of further action if misrepresentation is discovered.

(With inputs from agencies.)