Sebi trading ban targets 10 linked to Darjeeling Industriies over alleged misleading disclosures

Sebi has stopped 10 entities, including Darjeeling Industriies Ltd Managing Director Ashok Dilipkumar Jain, from trading in the company’s securities. The regulator cited suspected market manipulation, misleading disclosures, and diversion of preferential issue proceeds. The interim ex-parte order aimed to prevent potential gains after the lock-in period ends.

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The watchdog said it acted due to the nearing lock-in expiry on shares issued through a preferential allotment. Sebi estimated these allotted shares made up 66.26 per cent of the allotment. At current market prices, Sebi put the possible realisable value at about Rs 29.05 crore.

Sebi order on Darjeeling Industriies trading ban

In its 62-page order, Sebi said the registered office address used for disclosures raised doubts. A site check at the Girgaon, Mumbai office found no company operating there. The premises had been occupied by another firm since July 2024. Sebi said this indicated the company did not exist at that location.

Sebi stated that this prima facie indicated that board meetings and corporate announcements made from that address were not genuine. The regulator said the communications appeared fabricated and could mislead investors. Sebi also said Darjeeling Industriies was not found at either registered address in Mumbai or Rajkot.

Darjeeling Industriies disclosures and Sebi inspection

Sebi said its team visited the registered office on June 24, 2026. The team did not find Darjeeling Industriies operating there. However, on the same day, DIL told the BSE its board met. The update said the board considered receipt of funds against warrants.

The regulator also pointed to shifts in the company’s reported performance after Jain joined. Sebi said Jain became a director in October 2024. Soon after, DIL reported sharp increases in revenue and profits versus earlier years. It also approved a preferential warrant allotment to connected entities.

Preferential issue proceeds in Darjeeling Industriies under Sebi lens

Sebi said the company’s stated growth funding was later sent to other entities. Those recipients had no clear link to DIL’s business or the issue purpose. Some recipient entities were alleged to be linked to Jain. The regulator also said DIL’s subsidiary was not found at its disclosed address.

Sebi noted that DIL reported zero operating revenue during FY23 and FY24. Yet, after Jain became managing director, the share price and volumes rose sharply. Sebi said the company also claimed plans to diversify into unrelated, capital-heavy businesses. The regulator linked these claims to repeated positive updates.

The order said: "while clarifying that this was not wrongful gains which have been realised but the likely amount of wrongful gains which may accrue... if no action is taken.\" Sebi added: \"Accordingly, Sebi restrained noticees from buying, selling or dealing in securities of the company... either directly or indirectly, in any manner whatsoever, until further orders.\"

Along with the trading curb, Sebi told the noticees to assist its ongoing probe. The regulator said a detailed investigation would continue into alleged violations and other suspects. Besides Jain, those named include Dilip Keshrimal Sanklecha, Viha Ashok Jain, Sonali Abhaykumar Parmar, Abhishek Prakash Jain, Kirti Ravi Kothari, Kalidas Vijay Magar, Pradeep Sutodiya, Joy Banerjee and Punyah Sachin Jain.

With inputs from PTI