Market regulator Securities and Exchange Board of India (SEBI) has imposed a total penalty of ₹1 crore on Kalahridhaan Trendz Ltd (KTL) and three of the company directors Niranjan D Agarwal, Aditya N Agarwal and Sunitadevi Niranjan Agarwal for making false and misleading corporate disclosures, failing to disclose loan defaults and other governance lapses.
Under the
final order, SEBI has also barred Kalahridhaan Trendz and its managing director (MD) Niranjan Agarwal from the securities market for two years, while whole-time director (WTD) Aditya Agarwal and non-executive director Sunitadevi Agarwal have been restrained from the market for one year.
The case originated from an interim order issued in February 2025 after SEBI examined complaints received from HDFC Bank regarding Kalahridhaan Trendz's failure to disclose defaults in repayment of its bank dues. During the examination, the regulator also uncovered a series of misleading corporate announcements and governance failures at the company.
SEBI found that the company failed to disclose defaults in repayment of HDFC Bank dues, despite repeated opportunities to make the mandatory disclosures. According to the regulator, the company acknowledged the lapse, attributing it to negligence, but continued to remain in default of the disclosure requirements.
The regulator also held that Kalahridhaan Trendz issued misleading corporate announcements intended to create an overly optimistic picture of its business prospects. In May 2024, the company announced plans to significantly expand production capacity and projected a 25% increase in profit margins and revenue of ₹75 crore to ₹100 crore without providing supporting contracts, investment plans or other evidence. SEBI observed that while the announcement did not materially affect the share price, trading volumes surged by around 300%, indicating that it influenced investor activity.
A more serious violation related to the company's August 2024 announcement claiming that it had secured a ₹115.50 crore textile supply order from ‘Beximcorp Textiles’, purportedly a subsidiary of Bangladesh's Akij Textile Mills.
SEBI's investigation found that no such company existed in Bangladesh. Information obtained from the Bangladesh Securities Exchange Commission confirmed that no contract had been signed with Kalahridhaan Trendz. The regulator also found that the communications relied upon by the company originated from a Gmail account rather than an official corporate domain, the purported website did not exist and the email account was based in India, with evidence suggesting that emails used to support the announcement had been fabricated.
According to SEBI, these misleading announcements created a false impression about the company's prospects, positively affected the price and trading volumes of its shares and were intended to induce investors to trade in the scrip, amounting to fraudulent and unfair trade practices.
The regulator also found that the company failed to appoint a compliance officer within the prescribed time after the previous officer resigned and made a misleading disclosure regarding the appointment of an independent director whose independence was questionable due to his association with a promoter-controlled entity.
While the noticees argued that the disclosure lapses were inadvertent, that the company itself had been misled regarding the Bangladesh order and that no promoters had traded in the shares or derived any wrongful gains.
Rejecting the noticees' contention that the lapses were merely procedural or inadvertent, SEBI held that the company and its directors had violated the provisions of the SEBI Act, the SEBI (Listing Obligations and Disclosure Requirements) Regulations and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
Accordingly, SEBI directed Kalahridhaan Trendz and Niranjan D Agarwal to stay away from the securities market for two years, while Aditya N Agarwal and Sunitadevi Niranjan Agarwal have been restrained from accessing or dealing in the securities market for one year. The regulator also imposed monetary penalties of ₹40 lakh each on Kalahridhaan Trendz and Niranjan D Agarwal and ₹10 lakh each on Aditya and Sunitadevi Agarwal, aggregating ₹1 crore.
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