SEBI v. MPF Systems Limited and others (shell company financial statements, 2022)
Judgment entered
Checked against the primary document on October 8, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.
On 26 May 2022 a SEBI adjudicating officer re-set penalties on a suspected shell company and four officers at Rs 10 lakh in total, after the Securities Appellate Tribunal sent the matter back. The order rests on misstated debtors and creditors in the company's financial statements.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2022-05-26 |
| Date resolved | 2022-05-26 |
| Court | SEBI adjudicating officer |
| Status | judgment |
| Asset class | equities |
| Instruments | MPF Systems Limited shares |
| Venue | BSE |
| Criminal parallel | No |
| Defendants | MPF Systems Limited ; Kirti Salvi ; Anil Kothari ; Aakesh Chopra ; Ambrish Barsati Pal |
| Techniques | Misleading issuer disclosure |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 1m INR
What is alleged to have happened
A SEBI adjudicating officer, Geetha G, decided the matter on 26 May 2022 after the Securities Appellate Tribunal remitted it on 24 March 2022. The noticees were MPF Systems Ltd, its managing director Kirti Salvi, independent directors Anil Kothari and Aakesh Chopra, and chief financial officer Ambrish Barsati Pal.
The company was one of 331 suspected shell companies the Ministry of Corporate Affairs listed for SEBI in 2017. A forensic audit followed, and SEBI's show-cause notices alleged breaches of the fraudulent and unfair trade practices regulations and of listing rules. An earlier adjudication order of February 2020 imposed total penalties of Rs 22 lakh and a review order of December 2020 raised them to Rs 34 lakh. The Tribunal quashed the increase because the alleged breaches of the corporate governance rules on independent directors did not apply to a company of this size.
On the remand the officer dropped those governance charges and treated the remaining findings, drawn from an April 2020 whole-time member order, as established. Those were misrepresentation in the financial statements, including a full provision for non-existent sundry debtors of about Rs 5.97 crore and the wrong classification of creditors as trade payables. The officer considered this misleading in a company described as a shell with no real business.
The fresh penalty was Rs 5 lakh under section 15HA for the fraud provisions and Rs 5 lakh under section 23E of the Securities Contracts (Regulation) Act for the listing breaches, each payable jointly and severally by all five noticees, a total of Rs 10,00,000, payable within 45 days.
The record does not show whether the company's trading was itself manipulated, whether this penalty was appealed, or what the original forensic audit concluded beyond what the order summarises. This is a compliance-heavy penalty reassessment and is a borderline case for a market-abuse catalogue.
This library tags the matter as misleading issuer disclosure. The tagging is ours, not the regulator's.
For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.
What technique is this, and how does it work?
This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.
- Misleading issuer disclosure — see how it works, what statute it engages, and every other action tagged the same way.
Timeline
- 2022-05-26 SEBI order
Primary documents
Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.
Related actions
Other actions in the library sharing at least one technique tag with this one.