Whalesbook
Sebi Pushes Ahead with Fund Diversion Probe Against Bajaj Hindusthan
The Securities and Exchange Board of India (Sebi) has rebuffed efforts by Bajaj Hindusthan Sugar Limited and its promoters, Shishir and Kushagra Bajaj, to halt an ongoing investigation into alleged fund diversion. The regulator dismissed preliminary jurisdictional objections raised by the company, signaling a determined push to examine alleged financial irregularities dating back over a decade.
Regulator's Findings Ignite Probe
Sebi's investigation has prima facie identified substantial fund diversions. The market watchdog alleges that approximately ₹318.5 crore was diverted through Ojas Industries and another ₹870.6 crore through Bajaj Power Generation. These actions, coupled with alleged misleading disclosures concerning related-party transactions between fiscal years 2011 and 2022, form the crux of Sebi's case.
Bajaj Hindusthan's Defense Falls Short
The sugar manufacturer had argued that forensic audits conducted by Deloitte and Mazars, performed during Reserve Bank of India (RBI)-mandated debt restructuring, found no evidence of fund diversion or misappropriation. This, the company contended, should strip Sebi of its jurisdiction to pursue the matter.
Sebi Cites Audit Gaps
However, the Securities and Exchange Board of India found this defense insufficient. Sebi pointed out that the company's cited forensic audits conspicuously omitted an examination of the bank accounts belonging to Ojas Industries and Bajaj Power Generation, the very entities through which the alleged diversions were channeled. This critical gap, the regulator asserts, invalidates the company's jurisdictional challenge. The case now moves closer to a full adjudication, potentially impacting investor confidence and the company's regulatory standing.