SEBI v. Rajasthan Tube Manufacturing Company Limited and others (circular sales and misstated accounts, 2025)

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.

Report an error in this record (sebi-96418-misleading-issuer-disclosure-2025) by email

A SEBI adjudicating officer found that Rajasthan Tube Manufacturing and its promoters inflated sales and costs through circular trades with connected firms and moved about Rs 2.5 crore to promoters and relatives through a dummy conduit. The order imposed modest penalties, from Rs 1 lakh to Rs 10 lakh per noticee, on eleven noticees including independent directors.

The record

What was ordered

Civil penalty

—

Disgorgement

—

Prejudgment interest

—

Total relief

—

Alleged gain

—

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

On 4 September 2025 a SEBI adjudicating officer issued an order on Rajasthan Tube Manufacturing Company Limited and ten other noticees: the chairman and managing director Harish Chand Jain, executive director Rajshree Jain, chief financial officer Pradeep Jain, three promoters or relatives, two connected trading firms, and three independent directors on the audit committee. The case began with a March 2023 letter from the Jaipur tax authority about goods-less invoices, and SEBI examined April 2017 to March 2020.

SEBI alleged that the company used a circuitous web of artificial sales and purchases with connected firms to inflate turnover and profit and to misrepresent its accounts. The officer found that the managing director was the main architect, that a dummy firm not found at its registered address served as a conduit, and that in one round of circular dealing the company sold 5,896 metric tonnes of goods for about Rs 31.16 crore and bought nearly the same quantity back for about Rs 32.08 crore, at a small deliberate loss. The order puts the misstated amounts at 14 to 16 per cent of annual sales and 15 to 18 per cent of material costs, and finds about Rs 2.5 crore of funds routed through the conduit to the managing director, the chief financial officer and relatives.

The officer held that the company, the management and the connected firms breached the PFUTP Regulations, the listing rules and the securities laws, and that the independent directors had failed in their oversight by approving the accounts without proper checks.

Penalties were imposed under the fraud penalty, the general penalty and the securities contracts law provision on all eleven noticees. They included Rs 5 lakh, Rs 1 lakh and Rs 1 lakh on the company, Rs 5 lakh each on four promoters or connected firms, and small sums under the latter two provisions for the independent directors. A sum of Rs 10 lakh was set jointly and severally on the managing director and two others. The table is laid out so that the allocation cannot be read with certainty, so this record states no total. No market ban was imposed.

The record does not show whether any noticee appealed, whether the penalties were paid, or how investors fared. The order is a civil penalty, not a criminal conviction.

This library tags the matter as misleading issuer disclosure (financial statement fraud). 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. 2025-09-04 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.