SEBI v. Cox and Kings Financial Service Ltd (overstated profit, 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 December 2022 a SEBI adjudicating officer found that Cox and Kings Financial Service Ltd, a listed non-bank lender, reported profit for the nine months to December 2018 that was too high because some interest cost had been left out, and fined it Rs 5 lakh under the fraud provisions. The company was in liquidation, so the penalty is to be claimed from the liquidator.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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Penalty as published

500k 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

Adjudicating officer Soma Majumder of SEBI issued this order on 7 December 2022 against a single noticee, Cox and Kings Financial Service Limited, whose shares were listed on BSE and NSE from 11 April 2019. SEBI began after a June 2019 complaint through its online grievance system alleging insider trading and poor accounting. Its investigation covered the financial year 2018-19.

SEBI alleged that the company did not present a true and fair view of its financial results for the nine months ended 31 December 2018, and charged it under section 12A of the SEBI Act and regulations 3 and 4 of the PFUTP Regulations 2003.

The order finds that the company reported profit before tax of Rs 14.67 crore for the nine months and then a loss of Rs 9.70 crore for the quarter ending March 2019, leaving Rs 4.97 crore for the year. Its explanation, given to investigators, was that during a demerger it had inadvertently failed to record 19 days of interest for September and the interest for December 2018, and corrected this in the final quarter. The officer noted that an information memorandum and a newspaper advertisement carrying the higher figures were issued in that final quarter, one of them on the last working day, when the company already knew of the error. The officer concluded that the misstatement in public financials amounted to fraud on investors under the PFUTP rules.

The officer imposed a penalty of Rs 5,00,000 under section 15HA of the SEBI Act. In setting the sum, the officer found no quantifiable gain or investor loss and no repeat violation, and treated the correction in the next quarter as mitigating. Because the company had gone into liquidation, the penalty may be filed as a claim with the liquidator, who received a copy of the order.

The record does not show whether anything was recovered from the liquidation, whether an appeal was filed, or whether the insider-trading element of the original complaint was examined. No criminal case is described.

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. 2022-12-07 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.

• 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.