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SEBI bars Varanium Cloud and promoter for seven years
SEBI ordered the promoter Harshawardhan Sabale to disgorge ₹128.8 crore, and required the company to refund ₹62.5 crore plus 12% interest.
The Securities and Exchange Board of India has barred Varanium Cloud Ltd and its promoter Harshawardhan Sabale from the securities market for seven years, according to an order issued Tuesday. SEBI also ordered Sabale to disgorge ₹128.77 crore in alleged unlawful gains.
SEBI directed Varanium Cloud to return ₹62.51 crore that it said was diverted from proceeds of the company’s initial public offering and rights issue, along with 12% interest. The regulator said the funds were transferred to related parties and other entities, including ₹32.73 crore to Sabale.
SEBI said Varanium Cloud misrepresented its financial statements and disclosures, including through fictitious sales and purchases. It found reported sales and purchases were inflated and that several transactions were supported mainly by journal entries rather than adequate underlying evidence, and it also questioned public announcements about its business plans.
The regulator also tied its findings to a proposed acquisition of Fastway Transmissions Pvt. Ltd, saying the deal did not proceed and was used to mislead investors into providing fresh capital through a preferential issue. It added that Varanium Cloud’s share price rose after listing, from ₹131 on 27 September 2022 to ₹1,526.15 on 13 January 2023, before falling to ₹17.75 by 31 May 2024.