SEBI v. Sudhir Bhikhalal Parekh and others (Tirupati Fincorp preferential issue proceeds, 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.
In March 2022 a SEBI adjudicating officer penalised three former directors of Tirupati Fincorp Limited Rs 2 lakh each for misusing the proceeds of a Rs 4.2 crore preferential share issue, and two other directors Rs 1 lakh each for disclosure failures. The other 22 of 27 noticees were not held liable.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2022-03-30 |
| Date resolved | 2022-03-30 |
| Court | SEBI Adjudicating Officer |
| Status | judgment |
| Asset class | equities |
| Instruments | Tirupati Fincorp Limited shares |
| Venue | BSE |
| Criminal parallel | No |
| Defendants | Sudhir Bhikhalal Parekh ; Sheetal Mitesh Shah ; Kusum Jain ; Hitsharan Jain ; Saurabh Gandhi |
| Techniques |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
- Penalty as published
- 800k INR
What is alleged to have happened
This adjudication order of 30 March 2022 involves 27 noticees in the matter of Tirupati Fincorp Limited, a Jaipur non-banking finance company listed on the BSE in 2015. They were directors of the company over several years, together with related companies and individuals. SEBI investigated how the company used the Rs 4.2 crore it raised on 7 January 2013 by issuing 20 lakh shares at a premium to a preferential allottee group, over an investigation period from January 2013 to December 2015.
The show cause notice of 4 March 2021 alleged that the proceeds were diverted or misutilised, in breach of the PFUTP Regulations, and that the company and its directors failed to make required disclosures under the listing agreement and the LODR Regulations. One part of the notice alleged that about Rs 73 lakh was diverted.
The adjudicating officer found the company's account of use of the proceeds did not stand up. Of Rs 2.05 crore described as short-term loans, several loan agreements and disbursals predated the issue and some payments were to a fabric supplier, and the Rs 2.16 crore described as investments was largely a credit balance for fabrics supplied, so the company appeared to be a fabric trader rather than an NBFC. The officer concluded that the company did not use the proceeds for the stated objects and violated the PFUTP Regulations (Regulations 3(b), (c), (d), 4(1) and 4(2)(f)). Kusum Jain, Hitsharan Jain and Saurabh Gandhi were held liable as directors present at the key meetings and members of the audit committee.
Penalties were Rs 2 lakh each on those three under section 15HA, and Rs 1 lakh each on Sudhir Parekh and Sheetal Shah under section 15HB for failing to report the deviation, Rs 8 lakh in all. The charges against the remaining noticees, including most other directors, were found not established. In setting the amounts the officer noted that gains and investor losses had not been quantified, that the issue was over nine years old, that BSE had suspended the company, and that the company itself had applied for settlement.
The record does not show the company's own outcome, whether any appeal followed, or any criminal case.
This library applies no technique tag to the matter, because no technique, because the finding is misuse of preferential issue proceeds by an issuer, which fits none of the library's techniques with confidence. 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
- 2022-03-30 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.