Market regulator SEBI has barred former SecureKloud Technologies promoters Suresh Venkatachari and RS Ramani from the securities market for two years. This penalty follows an insider trading probe linked to earlier allegations of financial misstatements at the company. Each individual also faces a fine of Rs 10 lakh.
The Securities and Exchange Board of India (SEBI) has extended its restrictions on former SecureKloud Technologies promoters Suresh Venkatachari and RS Ramani. The regulator has imposed a two-year ban on both individuals from participating in the securities market and levied a penalty of Rs 10 lakh each. This order comes after investigations established that the promoters traded in company shares while in possession of unpublished price-sensitive information related to accounting irregularities.
Impact of Financial Irregularities
This action follows long-standing regulatory scrutiny regarding the company’s financial reporting between FY17 and FY19. During this period, investigators found that SecureKloud allegedly inflated its revenue through fictitious sales and improperly capitalized software development expenses. These actions led to a sharp rise in reported revenue from ₹271.93 crore in FY16 to ₹850.39 crore by FY19. Once the practice of booking these alleged non-genuine sales stopped in FY20, the company’s revenue dropped to ₹386.43 crore. Furthermore, the company later undertook significant write-offs and asset impairments exceeding ₹755 crore to correct its balance sheet.
Regulatory and Governance Background
The investigation into these financial misstatements led to broader governance concerns, including the 2019 resignation of the company's former statutory auditor, Deloitte Haskins & Sells. The auditor cited significant irregularities in financial statements and subsequently filed a formal fraud report with the Central Government. Following these findings, SEBI initiated multiple probes into the company and its management.
Insider Trading and Legal Status
SEBI’s latest order is connected to an investigation into share sales conducted by the promoters between April 2017 and September 2019. While the Securities Appellate Tribunal (SAT) upheld SEBI's findings regarding the accounting fraud on March 6, 2026, it did provide some relief by setting aside a specific directive for the company to recover ₹3.83 crore from Suresh Venkatachari, as the board had already adjusted this against his dues. The current two-year ban is scheduled to take effect after the completion of a previous three-year market ban that was imposed in December 2022.
Investors should note that while SEBI has currently declined to order further disgorgement due to complexities in calculating the exact loss avoided, the regulator retains the right to conduct further empirical analysis. The primary concern remains the past governance failures and the ongoing regulatory restrictions placed on the company's former leadership.