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SEBI has imposed fines ranging from Rs 3 crore to Rs 7 crore on Rana Sugars, its promoters and other related entities. | Photo Credit: Special Arrangement
Market regulator Securities and Exchange Board of India (SEBI) has barred 14 entities, including promoters of Rana Sugars and other related entities, from the securities markets for two years and imposed a fine of Rs 63 crore on them on charges of diversion of funds.
The regulator has also barred Inder Pratap Singh Rana (promoter), Ranjit Singh Rana (chairman), Vir Pratap Singh Rana (MD), Gurjit Singh Rana, Karan Pratap Singh Rana, Rajbans Kaur, Preet Inder Singh Rana and Sukhjinder Kaur (promoters) from holding any position as director or key managerial person of any other listed company for two years.
On conflict of interest of SEBI chairman
According to exchange data, Ranjit Singh, Veer Pratap and Sukhjinder Kaur were also the promoters of Rana Sugars Ltd.
Individually, SEBI imposed fines ranging from Rs 3 crore to Rs 7 crore on Rana Sugars, its promoters and other related entities.
“I find that Noticee Nos. 1 to 9, who are the promoters of RSL and the beneficiaries of such diversion of funds from RSL, have violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.”
SEBI Chief General Manager G. Ramar said in the final order on Tuesday (August 27, 2024), “…it was also found that Noticee No. 10 (Manoj Gupta), who was the CFO and who signed and certified such manipulated financial statements of RSL, aided and abetted the transfer of funds from RSL to its promoters and their family members, which is in violation of PFUTP Regulations.”
Investigation revealed that Rana Sugars Limited had failed to disclose Laxmiji Sugars Mills Company as a related party in the financial year 2016-17. Apart from this, the company also failed to disclose FTPL, CAPL, JABPL, RJPL and RGSPL as related parties.
Indra Pratap, Ranjit, Veer Pratap Singh Rana were the persons in charge and responsible for the affairs of Rana Sugars. Therefore, Rana Sugars, Indra Pratap, Ranjit Singh and Veer Pratap Singh Rana have violated the disclosure rules.
SEBI also found that the movement of funds between RSL and its related entities was not in the form of commercial advances for purchase of sugarcane seed and repayment of unsecured loans.
The related parties are Flawless Traders Private Limited (FTPL), Century Agros Private Limited (CAPL), Jai R Builders Private Limited (JABPL), RJ Texfab Private Limited (RJPL) and RGS Traders (RGSPL).
“These funds were then transferred by RSL to related parties, namely, promoters of Rana Sugars and their family members, on the same day. The regulator found that the related parties assisted Rana Sugars, its promoters and directors in siphoning off funds from RSL and violated PFUTP norms,” the order said.
Sebi also directed Rana Sugars to recover Rs 607 crore from related entities, which includes Rs 339 crore of receivables and Rs 268 crore of interest dues.
The regulator then directed Rana Sugars to take all necessary steps to recover the dues from these entities and advised them to appoint an independent law firm to take effective steps for recovery in consultation with NSE.
The market regulator also found that RSL, Inder Pratap Singh Rana, Ranjit Singh, Veer Pratap Singh, Gurjeet Singh, Karan Pratap Singh and Rajbans Kaur had failed to offer any explanation for not appearing before the investigating authority.
Further, they also failed to submit the information/documents sought by the IA, thereby hampering the investigation process and thus violating SEBI norms.
The order came following an investigation by Sebi into diversion of funds from the company by promoters and promoter-related entities of Rana Sugars and consequent misstatements in the company’s financial statements.
and whether the allegedly diverted funds have been siphoned off by the firm’s promoters and promoter-related entities, resulting in violation of the provisions of the PFUTP regulations and LODR (Listing Obligations and Disclosure Requirements) norms. The period of investigation was from Financial Year (FY) 2014-15 to FY 2020-21.
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