SEBI v. Bodhtree Consulting Limited and others (employee benefit trust share diversion, 2022)

Judgment entered

✓ Checked against the primary document on October 9, 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.

Report an error in this record (sebi-56896-market-abuse-2022) by email

In March 2022 a SEBI adjudicating officer penalised 21 noticees a total of Rs 1.21 crore over an employee benefit trust at Bodhtree Consulting Limited. The order finds that shares in the trust were moved out under the guise of an employee scheme and sold, with the proceeds routed to a company owned by the managing director and his wife.

The record

What was ordered

Civil penalty

—

Disgorgement

—

Prejudgment interest

—

Total relief

—

Alleged gain

—

Penalty as published

12.1m 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 adjudication order of 15 March 2022 concerns Bodhtree Consulting Limited (BCL), a listed company, the BCL Employees Benefits Trust set up to hold shares for employees, its managing director L Naga Rama Krishna and his wife L Muneashwari, a company they promoted called Kepler Information Systems, the trustees and several other individuals. There were 21 noticees in all. Most of the order deals with employee-share-scheme rules, but a part of it concerns fraud.

SEBI alleged breaches of the employee benefit scheme regulations, which cover how trustees are appointed and how schemes are run, and breaches of regulations 3 and 4 of the PFUTP Regulations and section 12A of the SEBI Act. The fraud allegation was that shares held in the trust, which the company had funded, were transferred free of cost to one individual in the guise of an employee benefit, sold in the market, and the proceeds passed on to Kepler, which was owned almost entirely by the managing director and his wife, with some of the money passing through loans between connected people.

The officer found that the managing director created a scheme that broke the scheme rules and moved wealth of the listed company's shareholders to a private company in a fraudulent and deceptive way. Eleven noticees were held to have violated the PFUTP Regulations, and the others were found liable only for the scheme rules.

The PFUTP penalties under section 15HA were Rs 90 lakh, jointly and severally, on L Naga Rama Krishna, L Muneashwari and Kepler, and Rs 10 lakh, jointly and severally, on seven others, among them Hassan Ali, Katragadda Rajesh and the trustees. Further penalties under section 15HB, from Rs 1 lakh to Rs 8 lakh, were imposed for scheme-rule breaches, bringing the total to Rs 1.21 crore.

The record does not show whether anyone appealed, whether the penalties were paid, or the amount of shareholder loss.

This library has no technique that fits diversion of company shares through an employee trust, so the matter is tagged with none. 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.

Timeline

1. 2022-03-15 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 page
• Order (PDF)

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Record added October 8, 2026. submit a correction.