SEBI v. ACIL Cotton Industries Ltd and others (misused auditor identity, 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.

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A SEBI adjudicating officer on 21 October 2022 penalised four BSE-listed companies and their directors for filing annual reports for 2012-13 that carried audit reports in the name of a chartered accountant firm that had not audited them. Penalties run from Rs 1 lakh to Rs 11 lakh per noticee.

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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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.

What is alleged to have happened

A chartered accountant, Dinesh S. Bang, complained to SEBI that his firm's name had been used without authority as statutory auditor of several listed companies. SEBI investigated four of them, all listed on BSE: ACIL Cotton Industries, Universal Credit & Securities, Mindvision Capital and RFL International. The adjudicating officer's order is dated 21 October 2022 and covers the four companies and 14 individuals, who were their directors, chairmen, managing directors and independent directors.

SEBI alleged that the companies' annual reports and other filings for 2012-13, given to the Registrar of Companies, the Reserve Bank of India and the stock exchange, used the firm's name as auditor on audit reports that were not genuine, so that true and fair audited financial statements were not published. It charged breaches of section 12A of the SEBI Act, the fraud-prevention rules in the PFUTP Regulations, the listing regulations and the old equity listing agreement. It also charged the individuals with ignoring SEBI summons.

The officer held the allegations established for the noticees in the order. The four companies each were penalised Rs 5 lakh under section 15HA, Rs 1 lakh under section 15HB and Rs 5 lakh under section 23E of the securities contracts law; the last is payable only after the outcome of a pending Supreme Court appeal in another case. The nine directors and executives named first were penalised Rs 5 lakh under 15HA, Rs 1 lakh under 15HB, Rs 1 lakh under 15A(a) and a penalty under section 23H of the securities contracts law. The remaining five individuals were penalised Rs 1 lakh each for ignoring summons.

A total is not stated here because the order's table gives the section 23H amount inconsistently, as Rs 1 lakh in figures and five lakh in words.

The record does not show whether anyone appealed, who in fact signed the audit reports, or any trading loss to investors.

This library tags the matter as misleading issuer disclosure. 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 one technique 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.

Timeline

1. 2022-10-21 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

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.