SEBI v. Mysore Amalgamated Coffee Estates Ltd (receipt of diverted Coffee Day funds, adjudication, 2023)

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 March 2023 a SEBI adjudicating officer fined Mysore Amalgamated Coffee Estates Ltd Rs 1 crore for aiding the diversion of about Rs 3,535 crore from seven Coffee Day Enterprises subsidiaries. Charges against three of the listed company's officers under the listing rules were dropped.

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

10m 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

This order follows SEBI's January 2023 final order against Coffee Day Enterprises Ltd (CDEL) over the diversion of funds from its subsidiaries; that order is covered in a separate record. It deals with the recipient company and with three CDEL insiders. Mysore Amalgamated Coffee Estates Ltd (MACEL) is a promoter-linked company, almost entirely owned by the family of the late chairman V. G. Siddhartha, to which the subsidiaries had lent money.

SEBI's notice of October 2021 alleged that Rs 3,535 crore moved from seven CDEL subsidiaries to MACEL and from MACEL on to entities controlled by Mr Siddhartha and his relatives, that this contributed to a fall in CDEL's share price after his death in July 2019, and that MACEL had aided and abetted the diversion, breaching section 12A and Regulations 3 and 4 of the fraud-on-the-market rules. It also alleged listing-rule failures by a promoter director, Malavika Hegde, the chief financial officer R. Ram Mohan and compliance officer Sadananda Poojary over related-party disclosures, approvals and compliance certificates.

The adjudicating officer found that MACEL accepted huge funds from the subsidiaries and so effectively aided and abetted the diversion, which in her view affected the share price, and held that it violated the fraud provisions. She imposed a penalty of Rs 1 crore under section 15HA, payable within 45 days, noting no quantifiable gain and no repetition.

For the three individuals she found that the listing rule on related-party transactions as it stood at the time did not cover transactions of a listed company's subsidiaries, as that was only changed in 2022, and she accepted their other points, so she dropped the allegations. She did say they ought to have followed the spirit of the rule.

The record does not show appeals, payment, or how much of the money has been recovered. It describes no criminal case. The finding of fraud rests on SEBI's investigation and the officer's reading of it; this page reports it as a finding.

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. 2023-03-27 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.