Blue Coast Hotels Ltd has paid ₹89.37 lakh to settle enforcement proceedings initiated by the Securities and Exchange Board of India (SEBI). This brings to a close a prolonged investigation into accounting irregularities and disclosure failures spanning four financial years from FY18-19 to FY21-22.
The settlement amount comprises ₹78 lakh, payable jointly and severally by Blue Coast Hotels and its promoter and whole-time director, Kushal Suri, along with an additional ₹11.37 lakh payable individually by Mr Suri.
The proceedings arose from an examination report submitted by the National Stock Exchange (NSE) which flagged multiple discrepancies in the company’s financial statements. Acting on these observations, SEBI conducted a detailed investigation and found violations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as well as non-compliance with relevant Indian Accounting Standards.
A key issue identified by SEBI was the company's failure to recognise a substantial contingent liability linked to the collapse of its Delhi Aerocity hotel project. Blue Coast Hotels had participated in a tender to develop a five-star hotel at Delhi Aerocity through a special purpose vehicle (SPV), Silver Resort Hotel India Private Ltd. To raise funds, commercial space in the proposed hotel was leased to buyers, with Blue Coast Hotels acting as a confirming party to the agreements.
However, due to non-payment of licence fees and other dues to Delhi International Airport Ltd, the project was taken over by the airport operator in July 2015. Subsequently, space buyers initiated legal proceedings seeking refunds. In October 2018, the Delhi High Court directed the defendants, including Blue Coast Hotels, to refund ₹318.95 crore to the affected buyers.
SEBI observed that, despite the court order and the company's potential financial exposure, Blue Coast Hotels failed to recognise this obligation as a contingent liability in its financial statements from FY18-19 to FY21-22, as required under Ind AS 1 and Ind AS 37. The liability was disclosed only in later years, initially without quantification, which SEBI deemed to be misleading and non-compliant.
The regulator also found that losses amounting to ₹8.82 crore related to the failed Delhi project were incorrectly classified as miscellaneous expenses, rather than being disclosed as exceptional items, thereby understating their impact. Further, a payment of ₹2.49 crore made in FY21-22 to Silver Resort Hotel India Pvt Ltd to address claims of space buyers was recorded as an advance to a supplier rather than as a loan, resulting in an inaccurate presentation of the company’s financial position.
In addition, SEBI noted several lapses in relation to material transactions with related parties. The sale of an investment worth ₹10.48 crore in Joy Hotel & Resorts Pvt Ltd to Silverring Drinks Pvt Ltd was identified as a material related party transaction that required prior shareholder approval, which was not obtained. The company also failed to adequately disclose related party relationships in its annual reports.
Another transaction involving the provision of ₹2.88 crore to Zios Medical was also deemed a material related party transaction. SEBI found that neither audit committee approval nor shareholder approval was obtained for this transaction, in violation of the LODR Regulations and Ind AS 24.
Mr Suri, during the relevant period, was held responsible for the company’s acts and omissions. SEBI observed that he had signed compliance certificates affirming that the financial statements presented a true and fair view and complied with applicable laws, despite the identified violations.
Adjudication proceedings were initiated through a show-cause notice (SCN) issued in March 2025. While the proceedings were pending, Blue Coast Hotels and Mr Suri opted to settle the matter without admitting or denying the findings. Following consideration by the SEBI internal committee (IC) and the high-powered advisory committee (HPAC), the settlement was approved.
SEBI confirmed receipt of the settlement amount on 31 December 2025 and disposed the proceedings through a settlement order dated 14 January 2026. The order also clarifies that it is without prejudice to SEBI’s right to reopen the matter in the event of any misrepresentation or breach of settlement conditions.
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