Sebi penalises Prabhu Steel Industries and three additional parties with Rs 12 lakh 

Prabhu Steel Industries Ltd. (PSIL) and its promoters, Harish Gangaram Agarwal, Dinesh Gangaram Agarwal, and Akshita Harish Agarwal, have been issued with penalties totaling Rs 12 lakh by Sebi for breaking regulatory standards. Each of these firms has been fined Rs 3 lakh by the authority. According to Sebi on Wednesday, they have 45 days to pay the fine.

On February 14, 2022, Sebi received a Financial Reporting Quality Review Report (FRQRR) on PSIL from the National Financial Reporting Authority. The report highlighted significant shortcomings in the company’s accounting and auditing standards.

Additionally, PSIL disregarded the Sebi directive by failing to account for depreciation on property, recognize the sale of shares as revenue from operations, and evaluate impairment loss reserves with regard to current loans, advances, and bank balances.

The regulator noted that during FY 2019–20, Dinesh Gangaram Agarwal acted as PSIL’s chairman, MD, and key managerial personnel in addition to Harish Gangaram Agarwal, who held the position of director full-time. Agarwal also attended all of the company’s board meetings. They have signed the company’s balance sheet, profit and loss statement, cash flow statement, management discussion and analysis report, corporate governance report, and form MGT-9 (extract of annual return).

“I note that Akshita Harish Agarwal was the CFO and KMP of PSIL during the investigation period, and provided the CEO/ CFO certification for the FY 19-20, under disclosure rules and states that financial results do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading,” Asha Shetty, Adjudicating Officer at Sebi, stated in the directive.

It is also mentioned that there was deceptive misrepresentation and that the financial statements had mistakes and did not adhere to accounting or auditing standards.