SEBI v. Salasar Trading Company and others (diversion of IPO proceeds, Shilpi Cable Technologies, 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 penalised seven recipients of money from Shilpi Cable Technologies Ltd's 2011 public offer a combined Rs 26 lakh. The order found that the company moved essentially all of its roughly Rs 50 crore of proceeds to other uses in April 2011 and that these noticees helped, defrauding investors who relied on the offer document.

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

2.6m 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

Shilpi Cable Technologies Ltd (SCTL) raised about Rs 55.87 crore in a book-built public offer in March 2011 at Rs 69 a share and listed on the BSE and NSE on 8 April 2011. On its first day the stock opened near Rs 78 but closed about 39 per cent lower. SEBI began its own investigation into the offer, covering bidding and trading patterns, how the proceeds were used, and departures from the objects stated in the prospectus.

The seven noticees were Salasar Trading Company Limited, run by Manoj Kumar Garg as proprietor, King Empire Tradexim Pvt. Ltd and its directors Om Raj Garg and Chandan Gupta, and King Power Industries Limited and its directors Avnish Bhatnagar and Arvind Poddar. SEBI alleged that the company diverted about Rs 50 crore of the offer proceeds during April 2011, the month of listing, and that Rs 13.3 crore went through these three entities: Rs 8.2 crore through Salasar, Rs 2.5 crore through King Power and Rs 2.6 crore through King Empire.

The adjudicating officer held the allegations established, concluding that the diversion of public-issue money was a fraud and deceit on investors who subscribed on the strength of the stated objects, and that the proprietor and directors, being in charge of their entities, played an integral role in aiding the company. He said the roughly 11 years between the offer and the notice, issued in May 2022, did not excuse the violation, though he treated the delay and the sums involved as mitigating when setting penalties.

Penalties under section 15HA were Rs 15 lakh on Salasar, Rs 2 lakh each on King Empire, Mr Om Raj Garg, Mr Gupta, King Power and Mr Poddar, and Rs 1 lakh on Mr Bhatnagar, Rs 26 lakh in total, payable within 45 days. The order states that investor loss cannot be computed and imposes no bar or disgorgement.

The record does not show appeals, payment, or the outcome of any proceedings against the company itself or its own management, who are not noticees in this order. It describes no criminal case.

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. 2023-03-28 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.