SEBI v. Binny Limited, M. Nandagopal and others (fund diversion and misstated accounts, 2024)

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. 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 July 2024 a SEBI executive director found that Binny Limited and its senior management diverted about Rs 712.64 crore to related parties and misstated its accounts over 2013-14 to 2020-21. The order directed the company to recover Rs 706.03 crore with interest, debarred four noticees for 3 years and one for 2 years, and imposed penalties totalling Rs 27.50 crore.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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Penalty as published

275m 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

SEBI executive director Babitha Rayudu issued the order on 31 July 2024. The noticees were Binny Limited, a textile and trading company, its chairman and managing director M. Nandagopal, other executive directors Arvind Nandagopal, Nate Nandha and S. Natarajan, and T. Krishnamurthy. SEBI had received complaints of siphoning of funds, misstated financials and undisclosed related party transactions, and appointed forensic auditors to review eight financial years from 2013-14 to 2020-21.

SEBI alleged that the group around the Nandagopal family diverted company money through advances to related parties and that the accounts did not fairly present this. It relied on the forensic audit, and alleged breaches of the fraud and unfair trade practice regulations, the listing regulations and the SEBI Act.

The order finds that Rs 712.64 crore was diverted by advances mainly to related parties that remained outstanding after more than ten years, in some cases without shareholder or audit committee approval and in some despite shareholder dissent. It treats the violations as repetitive. It gave Mr Nandha lighter treatment because he sat on the board for a shorter period, and disposed of the proceedings against Mr Natarajan without direction or penalty.

The directions required the company to bring back Rs 706.03 crore with interest at 12 per cent from each debit date within three months, and debarred the company, Mr M. Nandagopal, Mr Arvind Nandagopal and Mr Krishnamurthy from the securities market for 3 years, with the three individuals also barred from listed company and intermediary roles. Mr Nandha was debarred and barred for 2 years. Penalties under sections 15HA and 15HB were Rs 6.00 crore each on the company and three individuals and Rs 3.50 crore on Mr Nandha, Rs 27.50 crore in all.

The order says there were no exact figures for profit to the group or loss to investors. The record does not show whether anyone appealed, whether the money was recovered, or any criminal or insolvency steps. The matter concerns diversion of funds and company accounts, not a trading scheme.

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. 2024-07-31 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.