SEBI v. Educomp Solutions Ltd and others (concealed subsidiary dealings, 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.
In May 2023 a SEBI whole-time member found that Educomp Solutions and two of its directors concealed that a subsidiary, Edu Smart, was a related party, by presenting it as a third-party customer and leaving it out of consolidation. The two individuals were barred from the market for five and three years and fined Rs 2.10 crore in total.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2023-05-30 |
| Date resolved | 2023-05-30 |
| Court | SEBI whole-time member |
| Status | judgment |
| Asset class | equities |
| Instruments | Educomp Solutions Ltd shares |
| Venue | NSE, BSE |
| Criminal parallel | No |
| Bars imposed | Shantanu Prakash restrained from the securities market and from director or key managerial roles for 5 years, Jagdish Prakash restrained for 3 years, Educomp: bar and Rs 1 crore penalty apply only if its insolvency process is reversed |
| Defendants | Educomp Solutions Ltd ; Shantanu Prakash ; Jagdish Prakash |
| Techniques | Misleading issuer disclosure |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 21m INR
What is alleged to have happened
This order was issued on 30 May 2023 by Ashwani Bhatia, a whole-time member of SEBI. The noticees are Educomp Solutions Ltd, an education technology company listed on BSE and NSE since 2006, and its directors Shantanu Prakash and Jagdish Prakash. The case began with a 2015 complaint that Educomp had inflated sales and revenues from 2008-09 and written off more than Rs 900 crore of receivables and advances.
SEBI's show cause notice of May 2021 alleged that Educomp hid its true financial position by treating its subsidiary Edu Smart Services Pvt. Ltd. as an ordinary client. The subsidiary's dealings with schools were, in effect, reported as the company's own revenue, and the amounts the schools owed were obscured. It was also alleged that the subsidiary was not consolidated until 2012-13 and that significant transactions with it were presented as third-party dealings in the financial statements for 2009-10 to 2012-13 when they were related-party transactions.
The order sustains the case against the two individuals under section 12A(b) and (c) of the SEBI Act and the PFUTP Regulations, together with listing-agreement provisions as to Shantanu Prakash. Educomp itself is in an insolvency resolution process ordered by the NCLT, so the proceeding against it was disposed of without directions.
Shantanu Prakash was restrained from the securities market and from holding director or key managerial roles in listed or SEBI-registered entities for five years, and fined Rs 1 crore under section 15HA and Rs 10 lakh under the Securities Contracts (Regulation) Act, Rs 1.10 crore in all. Jagdish Prakash was restrained on the same basis for three years and fined Rs 1 crore. The two penalties total Rs 2.10 crore. If the insolvency process were reversed, Educomp would face a five-year bar and a Rs 1 crore penalty, which is not counted in the total.
The order is a regulatory sanction, not a criminal judgment, and describes no criminal case. The record does not show whether the directors appealed, whether the penalties were paid, or what has happened in the insolvency process since.
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
- 2023-05-30 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.