Market regulator SEBI has issued an interim order against Kore Digital, alleging a ₹541 crore financial misstatement and fund diversion. The company's top executives have been barred from accessing the securities market. The move follows concerns over the authenticity of subsidiaries and reported revenue, with a forensic audit now underway to examine the company's books.
The Securities and Exchange Board of India (SEBI) has passed an interim ex-parte order against Kore Digital Limited, following serious allegations of financial irregularities. The regulator has flagged potential misstatements in the company's consolidated financial statements totaling ₹541.3 crore across the 2025 and 2026 financial years. According to SEBI's findings, this amount represents approximately 73% of the company's reported consolidated revenue during that period, raising significant questions about the accuracy of its financial disclosures.
Details of Alleged Irregularities
The regulator's order points to multiple areas of concern. SEBI alleges that the company’s standalone financial statements included inflated revenues. Specifically, the regulator highlighted transactions amounting to ₹31.49 crore involving notable names like Vodafone, Bharti Airtel, and Navayuga Engineering Company Limited. Additionally, SEBI questioned revenue of ₹26.42 crore booked through Kashvee Infra Projects Pvt. Ltd. The order notes that GST authorities were in the process of cancelling the registration of this entity due to the absence of genuine business activity, and the entity could not be located at its registered address.
Further, SEBI raised concerns regarding the company's corporate structure and capital usage. The regulator alleged that six subsidiaries acquired during the 2025 financial year appeared to be non-genuine, lacking public records or statutory filings. There were also allegations that a substantial portion of the ₹40.05 crore raised through a preferential issue in March 2024 was diverted to entities that the regulator described as non-genuine.
Market Restrictions and Next Steps
In response to these findings, SEBI has imposed strict measures. The company, along with its Managing Director, Chief Executive Officer, and Chief Financial Officer, has been restrained from accessing the securities market to raise public funds. These executives have also been prohibited from buying, selling, or otherwise dealing in the securities of Kore Digital until further orders are passed.
The regulator has directed the company to ensure true and fair disclosures regarding its financial statements and related-party transactions. To further investigate the matter, SEBI will appoint a forensic auditor to review the company's books from its listing date until March 31, 2026. The matter has also been referred to the National Financial Reporting Authority (NFRA) for an examination of the statutory auditors' role. As this is an interim order based on prima facie findings, the Corporate Fraud Investigation Department will continue its probe to reach a final conclusion.