SEBI found that Tarini had furnished details of ₹7.94 crore, which was transferred by it mostly to various group entities on the ground of need of working capital. It was, however, found that these funds were used by these group entities for transfer to third parties which had purchased the shares of the company.
It was, therefore, concluded that Tarini used proceeds of the IPO for buying its own shares by using conduits in violation of the stated objects of the IPO.
The Whole Time Member (WTM) at SEBI directed Tarini to bring back the amount diverted to group entities alongwith interest. Tarini was also restrained from accessing the securities market for a period of four years.
Penalties ranging from ₹5 lakh to ₹5 crore were also imposed on the company and its directors.
Aggrieved by this order, Tarini approached SAT seeking quashing of the order.
Source: Barandbench
