SEBI has taken strict action against Kalahridhaan Trendz (KTL) and its directors, banning them from the securities market until further notice. This decision came after serious allegations that the company misled investors with false disclosures.
The investigation began when HDFC Bank filed complaints about defaults in credit card payments. Sebi found that Niranjan Agarwal, one of KTL’s directors, was also linked to Katex Exim, a company that was clearing dues to avoid issues related to its IPO.
KTL made two key announcements that raised suspicion.
– On May 2, the company claimed it was expanding capacity, promising a 25% increase in profit margins. However, Sebi found this claim to be misleading.
– Later, on August 12, KTL announced an order win worth ₹115.5 crore from a company named Beximcorp. When Sebi investigated, it found that no such company existed.
These misleading disclosures had a significant impact on KTL’s stock. After the May 2 announcement, trading volume surged by 300%. The August 12 claim further boosted stock prices and trading activity. At the same time, multiple key executives, including the company secretary, two independent directors, and the CFO, resigned, raising further concerns.
Adding to the controversy, KTL had planned another ₹21 crore fundraising through a rights issue, matching the funds raised in its IPO in February 2023. With Sebi’s intervention, the company’s market activities have now come to a halt, as authorities continue their probe into its misleading practices.