SEBI v. Rajlaxmi Industries Limited and others (funded preferential allotment, 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.

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In April 2022 a SEBI adjudicating officer imposed a joint and several penalty of Rs 40 lakh on Rajlaxmi Industries Limited, its two directors, eight allottees and two conduit companies, finding that the company funded eight allottees of its 2013 preferential issue through the conduits. The order treats this as a fraud on investors that faked capital infusion.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

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Penalty as published

4m 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 11 April 2022 involves thirteen noticees in the matter of Rajlaxmi Industries Limited, a textile-trading company listed on the BSE. They were the company, its directors Rahul Jagnani and Aditya Jaipuria, eight allottees of the preferential issue, and two companies, Dhanprayog Vintrade and Shivaangan Vintrade, described as conduits.

SEBI investigated the company's preferential allotment of 3 crore shares of Rs 10 each to 49 non-promoter allottees on 2 March 2013 and traced bank flows for each. For 41 allottees it drew no adverse inference. For eight, Deepak Agarwal, Deepak Kumar HUF, Dilipp Agarwal, Dilipp Agarwal HUF, Priti Agarwal, Sabita Agarwal, Sita Ram Agarwal and Vibha Agarwal, it traced Rs 34,87,500 each into their accounts from Dhanprayog and Shivaangan just before they paid for their shares.

The show cause notice of July 2021 alleged that the company routed money received from other allottees through the two conduits back to these eight, so that the allotment gave an impression of capital infusion when the company was in part funding its own issue. It was also alleged that the noticees failed to answer summons about the purpose of the transfers. The order finds the allegation made out, saying the company and its management played an integral role in the scheme, that genuine capital infusion was limited, and that the director noticees were responsible as persons in charge. It rejected the allottees' reliance on tribunal decisions about technical breaches, saying a fraudulent act cannot be technical.

The officer imposed a total penalty of Rs 40 lakh, payable jointly and severally by all thirteen noticees within 45 days, under sections 15A(a) and 15HA of the SEBI Act. Delay in starting proceedings, which began in 2021 for a 2013 allotment, and the value of the shares were treated as mitigating. The order says it cannot direct refunds or cancel the shares in this proceeding.

The record does not show the exact price of the issue, whether the penalty was paid or appealed, or any criminal case.

This library applies no technique tag to the matter, because no technique, because the finding is that an issuer funded its own preferential allotment to fake capital infusion, 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

1. 2022-04-11 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.

Record added October 8, 2026. submit a correction.