Case Overview

SEBI initiated an examination into Kore Digital Limited ("Kore") after observing a multifold increase in Revenue from Operations subsequent to its listing on the NSE SME platform on June 14, 2023. The examination covered the period from April 1, 2023 to March 31, 2026 to investigate possible violations of the SEBI Act, LODR Regulations, and PFUTP Regulations.

The principal allegations include:

  • Misrepresentation of Financial Statements: Kore's consolidated revenue showed an average of 75% contribution from three subsidiaries (Franken Telecom Pvt. Ltd., Wolter Infratech Pvt. Ltd., and KDL Realinfra Pvt. Ltd.) acquired between September-December 2024. Revenue increased from ₹21.27 crore (March 2023) to ₹408 crore (March 2026), primarily through these subsidiaries.
  • Non-existent Subsidiaries: The three subsidiaries were incorporated 6-9 months prior to acquisition, shared the same registered address, had no MCA filings (except MOA/AOA), and had cancelled GST registrations. Site visits confirmed these entities were non-existent at their registered addresses.
  • Forged Audit Reports: The statutory auditor of Kore, M/s J N Gupta & Co., relied on allegedly forged audit reports from subsidiary auditors. CA Riya Goyal denied conducting audits, and UDIN verification showed documents were provisional, not audited. CA Nikhil Gupta generated UDINs for limited review reports after SEBI inquiries, and Bose & Chakraborty's partner was found incapable of auditing due to health issues.
  • Revenue Inflation: Kore inflated standalone revenue by ₹31.49 crore during FY 2023-24 and 2024-25 through discrepancies with major clients:
  • NECL: Difference of ₹41.97 crore in FY 2024-25
  • Vodafone: Kore booked ₹13.48 crore vs. actual ₹0
  • Airtel: Kore booked ₹24.60 crore vs. actual ₹7.21 crore
  • Fictitious Entity Transactions: Revenue of ₹26.42 crore booked from Kashvee Infraprojects Pvt. Ltd., which shared Kore's address and had dummy directors. GST authorities confirmed Kashvee as non-genuine with suspended registration.
  • Bank Book Manipulation: Significant discrepancies found between Kore's IndusInd Bank book entries and actual bank statements, with fictitious receipts/payments recorded at quarter-ends involving Kashvee, Ravindra Doshi, Golart, and Rankone Market India Pvt. Ltd.
  • Diversion of Funds: ₹40.05 crore raised through preferential issue in March 2024 was diverted to Kashvee (₹4.62 crore) and SD Square Manpower Pvt. Ltd. (₹7.52 crore), which further transferred funds to Kashvee. Site visits confirmed SD Square was non-existent.
  • Price Impact: False corporate announcements and misrepresented financials induced investor trading, with average daily volume rising from 5,858 shares (Dec 2024) to 21,804 shares (March 2025) post-acquisition announcement.

Final Outcome

SEBI issued the following interim directions under Sections 11(1), 11(4), and 11B of the SEBI Act:

1. Kore Digital Limited must make true and fair disclosures of financial statements and related party transactions.

2. All noticees (Kore Digital, Ravindra Doshi, Chaitanya Doshi, Kashmira Doshi) are restrained from accessing the securities market.

3. The individual directors are restrained from buying, selling, or dealing in Kore securities.

4. NSE is directed not to allow Kore's migration from SME to Main Board without SEBI clearance.

5. A forensic auditor will be appointed to examine Kore's books from listing date to March 31, 2026.

6. The matter is referred to NFRA for action against auditors M/s J N Gupta & Co., CA Nikhil Gupta, and Bose & Chakraborty.

The directions remain in force until further orders. Noticees may file replies/objections within 21 days and request a personal hearing.

Topics: Financial Misrepresentation, Subsidiary Fraud, SEBI Enforcement