Markets regulator Sebi on Thursday barred SecUR Credentials and managing director Rahul Belwalkar from the securities market until further orders for alleged fund diversion. The regulator also restrained Belwalkar from acting as a director of any listed company or any Sebi-registered intermediary until further orders.
In October 2022, SecUR Credentials Ltd, a company that had migrated from the SME platform to the mainboard.
Sebi conducted a suo moto examination into the affairs of SecUR to ascertain whether there were any violations of the provisions of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) and disclosure rules.
The period of examination was from April 2020 to March 2024.
“I find an opaqueness in the manner in which the business dealings of SecUR are being carried out through its MD, Belwalkar.
“This cannot be viewed lightly, especially considering the prima facie findings concerning the diversion of SecUR’s funds to the promoter, directors, and other individuals /entities by its MD (enabled through non-segregation of bank accounts of the company and Belwalkar), and which prima facie amounted to a violation of the PFUTP regulations,” Sebi’s whole time member Ashwani Bhatia said in the interim order.
In addition, material-related party transactions (RPTs) were carried out by the company (SecUR) with its MD (Rahul Belwalkar) without any requisite shareholder approval in violation of the (Listing Obligations and Disclosure Requirements) LODR norms.
In its order, Sebi also noted that the independent directors (including the chairman of the audit committee) had received funds from the company’s MD over and above their sitting fees.
Additionally, Belwalkar was noted to have transferred funds to the extent of Rs 8.23 crore to Varanium Cloud MD Harshwardhan Sabale, the regulator said.
SecUR Credentials and Belwalkar have also adopted a cavalier approach while seeking to ensure compliance with fair and accurate disclosure requirements as is evident from the non-disclosure of the outstanding balance in respect of the unsecured loan availed from its MD, accurate disclosure of the status of its rights issue, Sebi said in the order.
“I am of the opinion that interim directions against the company and its MD are warranted in the instant proceedings, to safeguard their interests,” Bhatia said.
