SEBI v. Varanium Cloud Limited and others (false accounts, diverted IPO funds and share sales, 2026)
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. 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.
A SEBI whole-time member found in August 2026 that Varanium Cloud, an SME-listed company, misrepresented its financial statements and prospectus and diverted Rs 62.51 crore of IPO and rights-issue money, while its promoter sold shares at inflated prices. The final order imposes debarments of up to seven years, disgorgement of about Rs 128.77 crore from the promoter and penalties totalling Rs 33.08 crore.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2026-08-25 |
| Date resolved | 2026-08-25 |
| Court | SEBI whole-time member |
| Status | judgment |
| Asset class | equities |
| Instruments | Varanium Cloud Limited shares |
| Venue | NSE |
| Criminal parallel | No |
| Bars imposed | Varanium Cloud and promoter Harshawardhan Sabale debarred from the securities market for 7 years, Raj Jagtani 4 years, Athos Capital Advisors and Jinesh Mehta 2 years, First Overseas Capital 2 years, Three individuals 1 year each, Director and key-managerial bars for the individuals for the same periods |
| Defendants | Varanium Cloud Limited ; Harshawardhan Hanmant Sabale ; Vinayak Vasant Jadhav ; Mukundan Raghavan ; Hetal Somani ; First Overseas Capital Limited ; Athos Capital Advisors Private Limited ; Jinesh Narottamdas Mehta ; Raj Jagtani (proprietor of BM Traders) ; Fahim Iunus Shaikh ; Kalpesh Anil Acharekar |
| Also named elsewhere | First Overseas Capital Limited |
| Techniques | Misleading issuer disclosure , Price manipulation |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 331m INR
What is alleged to have happened
The final order of 25 August 2026 was made by a SEBI whole-time member. It follows an interim order of 10 May 2024, issued after media reports, and a confirmatory order of 21 October 2024 against Varanium Cloud Limited (VCL) and its promoter and managing director Harshawardhan Sabale. Eleven noticees are named, including VCL; Mr Sabale; directors and executives; the merchant banker First Overseas Capital Limited; Athos Capital Advisors and its proprietor Jinesh Mehta; and Raj Jagtani, proprietor of BM Traders.
The show-cause notice of 20 October 2025 alleged that VCL presented misrepresented financial statements and a prospectus that included fictitious sales and purchases as a scheme to defraud shareholders; filed an incorrect statement on how IPO money was used and incorrect shareholding patterns; and misused IPO and rights-issue proceeds, diverting funds. It named Mr Sabale and others for their roles in the scheme and in selling shares at high prices, and the merchant banker for its due diligence.
The order finds that Rs 62.51 crore was diverted from VCL and directs its return with 12 per cent interest within three months. It holds Mr Sabale responsible for the scheme and for unlawful gains on share sales, and holds the other debarred noticees liable for their roles as directors, financial intermediaries or trading counterparties. Two noticees, Hetal Somani and Kalpesh Acharekar, were cleared without direction.
The debarments are seven years for VCL and Mr Sabale, four years for Mr Jagtani, two years each for Athos Capital, Mr Mehta and First Overseas Capital (to run after an earlier October 2025 debarment of the merchant banker), and one year for three individuals. Mr Sabale must disgorge Rs 1,28,77,11,275 with 12 per cent simple interest. Penalties include Rs 20.4 crore on Mr Sabale and Rs 10.1 crore on Mr Jagtani, totalling Rs 33.08 crore.
The record does not show an appeal, how much of the diverted money has been recovered, or investor losses. It describes no criminal case in the order. SEBI imposes sanctions and penalties and does not convict.
This library tags the matter as misleading issuer disclosure and price manipulation. 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 2 techniques 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.
- Price manipulation — see how it works, what statute it engages, and every other action tagged the same way.
Timeline
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.