SEBI v. Sulabh Engineers and Services Ltd and others (alleged funding of preferential allotments, 2023)
Dismissed
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 January 2023 a SEBI adjudicating officer dismissed charges against 43 noticees, including the listed company Sulabh Engineers, that it had funded its own preferential allottees through conduit accounts. The only link was a Rs 1 crore loan that came after the allotments and was repaid with interest.
The record
| Agency | SEBI (India) |
|---|---|
| Date filed | 2023-01-23 |
| Date resolved | 2023-01-23 |
| Court | SEBI adjudicating officer |
| Status | dismissed |
| Asset class | equities |
| Instruments | Sulabh Engineers and Services shares (preferential allotments) |
| Venue | BSE |
| Criminal parallel | No |
| Defendants | Sulabh Engineers & Services Ltd ; Manoj Kumar Agarwal ; Krishana Agarwal ; Ruchi Agarwal ; Santosh Kumar Agarwal ; Sandhya Agarwal ; Santosh Kumar Agarwal HUF ; Govind Mercantile Pvt Ltd ; Manish Agarwal ; Manish Kumar Garg ; Praveen Kumar Kurele ; Naveen Kumar Kurele |
| Also named elsewhere | Sulabh Engineers & Services Ltd |
| Techniques |
What was ordered
- Civil penalty
- —
- Disgorgement
- —
- Prejudgment interest
- —
- Total relief
- —
- Alleged gain
- —
What is alleged to have happened
This adjudication order of 23 January 2023 was made by SEBI adjudicating officer Maninder Cheema. It covers 43 noticees: Sulabh Engineers & Services Ltd, eight promoters, sixteen preferential allottees and eighteen entities said to have been used as conduits. Twelve are named above, so the other 31 are not listed in this record.
SEBI alleged that the company had funded the allottees of two preferential issues, on 28 March 2011 and 23 March 2012, totalling about Rs 19.60 crore, by routing money through conduit accounts, to give a false picture of fresh capital and so defraud investors, in breach of section 12A of the SEBI Act and PFUTP Regulations 3(b) to (d) and 4(1), with penalty proceedings under section 15HA. SEBI's chain began with a Rs 100 lakh transfer by the company to a jeweller, Sona Chandi, on 27 March 2012.
The adjudicating officer held that the chain did not hold. The transfer came a year after the first allotment and four days after the second, and the allottees' application money for the Rs 14 crore second issue had reached the company 13 days before it. He found the Rs 1 crore was a loan by a registered non-bank lender, with interest booked, tax deducted at source and full repayment in October and November 2013. He also found no documents proving the alleged links between noticees, that the notice rested partly on confusing two people with the same name, and that many noticees had shown their transfers were ordinary business.
He concluded that funding of the allotments by the company was not established and that the fraud provisions were therefore not breached, and disposed of the proceedings against all 43 noticees with no penalty. A typing error in the notice, which cited the wrong penalty section, was noted but was not decisive.
The record does not show whether SEBI appealed, or what the actual source of the allottees' money was.
No library technique fits an unproven allegation of funding an issue, so the technique list is empty.
This library tags the matter with no technique and records it as a dismissed fraud allegation. 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
- 2023-01-23 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.