The capital market regulator, the Securities and Exchange Board of India (SEBI), imposed penalties totaling ₹54 lakh on Jaiprakash Power Ventures, its Managing Director and CEO Suren Jain, and other top officials on Friday for allegedly misrepresenting the company’s financial statements.
In an 89-page order, the regulator directed Jaiprakash Power Ventures Ltd (JPVL), a part of the Jaypee Group, to pay the penalties within 45 days. The SEBI report named JPVL MD and CEO Suren Jain, Chairperson Manoj Gaur, Executive Directors Sunil Kumar Sharma and Praveen Kumar Singh, Chief Financial Officer R.K. Porwal, and former Whole-Time Director M.K.V. Rama Rao for misrepresenting the company’s books of accounts and violating the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) and Listing Obligations and Disclosure Requirements (LODR) regulations.
“I hold that the company overstated its books of accounts by way of not providing interest on its current investments, Foreign Currency Convertible Bonds (FCCBs), and other unsecured loans in FY 2018-19. Therefore, the financial statements of the company have not reflected a true and fair view,” stated SEBI Adjudicating Officer Asha Shetty.
The regulator levied a fine of ₹14 lakh on Jaiprakash Power Ventures, ₹7 lakh each on Jain, Gaur, Sharma, and Singh, and ₹6 lakh each on Porwal and Rao.
The SEBI investigation found that the company overstated its financial statements by not adopting correct accounting practices. Specifically, it failed to measure investments in Sangam Power Generation Company Ltd (SPGCL), Jaypee Arunachal Power Ltd (JAPL), and Jaypee Meghalaya Power Ltd (JMPL) at fair value during FY 2012-13 to FY 2021-22. Consequently, the company’s profit and loss account and balance sheet did not reflect a true and fair view.
