SEBI v. Kamal Nayan Sharma and others (misstated financials, Indian Infotech & Software, 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.

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In June 2022 a SEBI adjudicating officer penalised three directors of Indian Infotech & Software Ltd, a listed company flagged as a suspected shell, for misstated financial statements and for obstructing a forensic audit. Penalties totalled Rs 23,00,000.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

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Penalty as published

2.3m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

An adjudicating officer of SEBI issued this order on 15 June 2022 in the matter of Indian Infotech & Software Ltd (IISL). The three noticees were directors: Kamal Nayan Sharma, Harish Joshi and Mukund Bhardwaj. The case arose after the Ministry of Corporate Affairs gave SEBI a list of suspected shell companies in 2017, and SEBI had the exchanges commission a forensic audit of IISL.

SEBI's show cause notice of 9 March 2021 alleged that the company's accounts were misrepresented. It pointed to roughly Rs 8.47 crore of quoted shares said to have been sold off-market to one buyer while still sitting in the company's own depository account, to about Rs 51 crore of goodwill with no supporting valuation report, and to a business profile that conflicted with the company's registration as a non-banking finance company and its stated objects. It also alleged that bank accounts showed money passing straight through, and that the directors did not cooperate with the forensic auditor.

The order finds that the sale of the shares was not documented, that the goodwill valuation report was not produced, that the claimed business was contradicted by the record, that the company appeared to be used as a conduit for accommodation transactions, and that the forensic audit could not start because of non-cooperation. It holds that the directors failed to ensure true and fair financial statements and that this misled investors, breaching section 12A of the SEBI Act, the fraud regulations and the listing rules.

Penalties were Rs 8,00,000 on Mr Sharma, Rs 8,00,000 on Mr Joshi and Rs 7,00,000 on Mr Bhardwaj, a total of Rs 23,00,000, payable within 45 days. The order notes that the company and one other director had separately applied to settle, and no gain or investor loss could be quantified.

The record does not show any trading in the company's shares by the noticees, any appeal, or whether the company itself was later delisted or sanctioned.

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

1. 2022-06-15 SEBI adjudication 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.

• SEBI order

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.