The stock’s decline extended a lower circuit streak from Friday, following Sebi’s directive for Mishtann Foods to recover nearly Rs 100 crore allegedly siphoned through dubious transactions with related parties.
Sebi said Mishtann Foods engaged in circular trading with fictitious buyers and suppliers, many of which were shell entities controlled by the companyβs directors and their associates.
βThese transactions inflated the companyβs financial performance on paper, misleading investors and regulators,” Sebi said in its order.
Sebi’s investigation revealed that the company engaged in circular trading with fictitious buyers and suppliers, many of whom were shell entities controlled by its directors and associates. These actions reportedly inflated Mishtann Foodsβ financial performance, misleading investors and regulators.
The Sebi order also highlighted a sharp rise in the companyβs public shareholder base β from 516 in FY18 to 4.23 lakh by September 2024. Meanwhile, Hiteshkumar Patel, the sole promoter, offloaded shares worth about Rs 50 crore during July-August 2024, marking a continued decline in promoter holdings since March 2024.Sebi has issued show-cause notices to 24 entities, including Mishtann Foods and its key officials, demanding explanations within 21 days. The interim order follows an extensive investigation into the companyβs activities from April 2017 to March 2024, prompted by complaints of GST fraud and financial irregularities.Also read | FII’s November surprise: A tale of two halves in Indian stocks
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