Authority: Amarjeet Singh, Whole Time Member, Securities and Exchange Board of India
Order Date: July 30, 2026
Case Overview
The proceedings emanate from an Interim Order cum Show Cause Notice dated February 10, 2025 against Kalahridhaan Trendz Limited (KTL) and its directors. SEBI initiated examination based on complaints from HDFC Bank regarding KTL's default in repayment of credit card dues (₹50.99 lakh) and business loan dues (₹30.23 lakh) during the examination period from February 23, 2024 to December 15, 2024. KTL is a textile company listed on NSE's SME Platform since February 23, 2024, having raised ₹22.49 crore through an IPO at ₹45 per share.
The principal allegations included:
1. Non-disclosure of Default: KTL failed to disclose defaults to HDFC Bank despite regulatory requirements under LODR Regulations
2. False Corporate Announcements:
- May 02, 2024: Announced 'Strategic Expansion and Expected Increase in Profit Margin' claiming capacity expansion to 7 lakh meters/month and 25% profit margin increase without specific details
- August 12, 2024: Announced fictitious ₹115.50 crore order from 'Beximcorp Textiles, Bangladesh' which SEBI investigation revealed to be non-existent
3. Governance Failures: Non-appointment of Compliance Officer beyond permissible 3-month period and questionable appointment of independent director with conflicts of interest
SEBI's investigation revealed that the Bangladesh entity 'Beximcorp Textiles' did not exist in official registries, used Gmail for communications (+971 UAE numbers), and the email account was based in India with last login before the purported communications. The announcements significantly impacted trading volume (300% increase on May 2) and price (20% increase on August 12).
Final Outcome
SEBI found KTL and its directors guilty of multiple violations:
- Violation of Regulation 30(2) read with Schedule III of LODR Regulations for non-disclosure of defaults
- Violation of Regulation 4(1)(c),(e),(h),(i) of LODR Regulations for misleading disclosures
- Violation of Section 12A(a),(b),(c) of SEBI Act and Regulations 3(a),(c),(d), 4(1) and 4(2)(k),(r) of PFUTP Regulations for fraudulent practices
- Violation of Regulation 6(1) and (1A) of LODR for non-appointment of Compliance Officer
The WTM imposed the following directions:
- KTL and MD Niranjan Agarwal: 2-year market ban + ₹40 lakh penalty (₹30L under 15HA + ₹10L under 15HB)
- Directors Aditya Agarwal and Sunitadevi Agarwal: 1-year market ban + ₹10 lakh penalty each under 15HB
- Total monetary penalty: ₹1 crore
- Noticees permitted to settle existing derivative positions within 3 months
- NSE advised to consider compulsory delisting due to continuing compliance deficiencies
Topics: SEBI Enforcement, Market Manipulation, Disclosure Violations