Omaxe Shares Plummet 5% Amid Sebi Restrictions on Company and Executives

Shares of Omaxe fell 5% following Sebi restrictions on the firm and its executives for two years, extending a three-session decline totaling 15%. The penalties relate to alleged financial misrepresentation. Omaxe plans to challenge the order. Markets saw broader declines: BSE Sensex fell 0.86%, and NSE Nifty dropped 239 points.

Shares of Omaxe fell 5 per cent on Friday following Sebi restrictions on the realty firm, its Chairman, MD, and three others from the securities market for two years for misrepresenting the company's financials.

Extending its losses for the third consecutive session, Omaxe's shares declined 5 per cent each to Rs 139.15 and 137.40 on the NSE and BSE, respectively.

The company's shares have dropped 15 per cent over the past three sessions on both exchanges.

In broader equity markets, the 30-share benchmark BSE Sensex tumbled 700.52 points or 0.86 per cent to 81,167.03 while the NSE Nifty declined 239.75 points to 24,771.15.

Realty firm Omaxe announced it will consider challenging the market regulator Sebi's order on Tuesday, which barred the company, its Chairman Rohtas Goel, MD Mohit Goel, and three others from the securities market for two years for misrepresentation in the company's financial statements.

"The company has not received any order from Sebi. Once received, the content will be verified, and appropriate remedies available under the law, including filing an appeal, will be contemplated," an Omaxe spokesperson said in a statement.

"According to news articles, it appears to be more in the nature of accounting interpretations that were explained through documentation, market practices, and case laws. We will file our response to stock exchanges within the required time frame upon receipt of the order," the spokesperson added.

In its 126-page final order, Sebi also restrained Sudhangshu S Biswal, Arun Kumar Pandey, and Vimal Gupta from the securities markets.

A fine of Rs 47 lakh was levied on 16 entities, including Omaxe, Rohtas Goel, Mohit Goel, and three others.

Sebi stated that these entities had acted in concert to execute a fraudulent scheme that they tried to portray as normal transactions for the company's benefit, although it was experiencing a loss. They also attempted to portray the activities as merely lending, thereby trying to maintain Omaxe's stock price for three years.

The company misrepresented its financial statements during 2018-19, 2019-20, and 2020-21 concerning revenue, debtors, advances, and expenses.

The order came after Sebi received a complaint alleging that Omaxe conducted fraudulent transactions, diverted/siphoned funds, misrepresented financial statements, and inflated turnover, among other serious allegations. As a result, Sebi took the matter for further examination, including a forensic audit.

The investigation period covered April 1, 2018, to March 31, 2021, encompassing the fiscal years 2018-19, 2019-20, and 2020-21.

(With inputs from agencies.)