SEBI v. Esteem Bio Organic Food Processing Ltd. and others (IPO funding scheme, 2022)

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.

Report an error in this record (sebi-58508-misleading-issuer-disclosure-2022) by email

In April 2022 a SEBI adjudicating officer penalised an SME-listed company, two insiders and nine funding or trading entities a total of about Rs 73 lakh for a scheme in which connected parties funded IPO applicants and IPO proceeds were routed back to them. Rs 5 lakh of the total is payable only depending on a pending Supreme Court appeal.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

—

Total relief

—

Alleged gain

—

Penalty as published

7.3m 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

A SEBI adjudicating officer, Prasanta Mahapatra, decided the matter on 28 April 2022. The eleven noticees are Esteem Bio Organic Food Processing Ltd., which listed on the BSE SME platform in January 2013 after raising Rs 11.25 crore at Rs 25 a share, two individuals connected to the company, Brij Kishore Sabharwal and Vinod Kumar Garg, and eight funding or trading entities and proprietors, including Goldline International Finvest Ltd.

The case grew out of a June 2015 interim order restraining 254 entities across several IPOs. SEBI's investigation found that entities connected to the company had financed the IPO applicants, and that parts of the IPO money, such as about Rs 2.4 crore, were moved through other firms back to the connected entities. The company's prospectus had described how the money would be used for cultivation facilities, farm development and equipment. It was also alleged that the company misreported the use of the proceeds and breached its listing and disclosure obligations.

The order finds that the company, Mr Sabharwal and Mr Garg breached regulations 3 and 4 of the PFUTP Regulations by misleading disclosures and misuse of the IPO route, along with listing and issue-of-capital rules, and that the funding and trading entities took part in the fraud. The officer held that the funding and trading entities had used the exchange system to inflate volume and price.

Penalties under section 15HA of the SEBI Act were Rs 5 lakh on each of the eleven noticees. Rs 2 lakh under section 15A(a) was added for the company, Mr Sabharwal and Goldline, Rs 5 lakh under section 15HB for the company, Rs 1 lakh under 15HB each for Mr Sabharwal and Mr Garg, and Rs 5 lakh on the company under section 23E of the Securities Contracts (Regulation) Act. That last sum is payable only depending on the Supreme Court's decision in a pending appeal in the Suzlon matter. The total of Rs 73 lakh includes it.

The record does not show whether the order was appealed, how much money was recovered, or what investors lost.

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

1. 2022-04-28 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
• Order (PDF)

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

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.