SEBI Bans Listed SME Kalahridhaan Trendz, Promoters for Deceptive Stock Manipulation
Moneylife Digital Team 11 February 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a ban on Kalahridhaan Trendz Ltd (KTL), a small and medium enterprise (SME) listed on the National Stock Exchange (NSE) 's Emerge platform, and the company promoters for violating disclosure regulations.
 
Along with KTL, its promoters Niranjan D Agarwal, Aditya N Agarwal and Sunita Niranjan Agarwal have also been restricted from participating in the markets until further notice.
 
In the interim order-cum-show-cause notice, Ashwani Bhatia, whole-time member (WTM) of SEBI, says, "There is a risk that if further fundraising is not stopped, the public shareholders, lured by the false and misleading corporate announcements made by the Company in the recent past, may be tempted to invest further in the company and suffer losses in the long run."
 
SEBI has instructed Kalahridhaan Trendz and its promoters to provide reasons for why further debarment actions should not be taken against them.
 
SEBI's action follows complaints from HDFC Bank regarding the company's failure to pay its credit card dues. In response, SEBI launched an investigation from 23 February 2024 to 15 December 2024 to examine potential violations of its regulations.
 
During the investigation, SEBI discovered that Kalahridhaan Trendz had not disclosed critical information about its default in repaying dues to HDFC Bank. Additionally, the company falsely claimed to have secured a Rs115 crore order from Beximcorp Textiles, a Bangladeshi firm. However, no such company was found in the database and another textile company with a similar name denied any agreement with Kalahridhaan Trendz.
 
SEBI accused Kalahridhaan Trendz of intentionally providing false information to mislead the regulator, with the aim of manipulating stock prices and influencing investor decisions. The regulator highlighted the need for interim measures, especially since Kalahridhaan Trendz had approved a rights issue to raise Rs21 crore, nearly the same amount it raised in its SME intial public offering (IPO) in February 2024.
 
In response to SEBI inquiries, Kalahridhaan Trendz allegedly attempted to cover up its actions by fabricating email communications. The regulator noted that the company's misleading corporate announcements had a positive impact on the price and trading volume of its shares.
 
SEBI emphasised that these announcements were likely designed to present a distorted view of the company prospects, encouraging investors to trade in Kalahridhaan Trendz shares.
 
By engaging in these deceptive practices, SEBI concluded that Kalahridhaan Trendz violated fair trade principles and indulged in fraudulent activities.
 
Furthermore, the regulator noted that Niranjan Agarwal, Aditya Agarwal, and Sunita Agarwal, holding key positions as the managing director (MD), whole-time director (WTM), and non-executive director, respectively, are accountable for these violations.
 
SEBI also found that Kalahridhaan Trendz had failed to appoint a compliance officer, as required under the Listing Obligations and Disclosure Requirements (LODR) Rules. The company also issued misleading announcements regarding the appointment of independent directors, contravening disclosure norms.
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