Man Industries Seeks Legal Remedies After SEBI Bars Firm, Top Officials From Securities Market

Man Industries Ltd. on Tuesday issued a clarification after the Securities and Exchange Board of India barred the company and its three senior executives from accessing the securities markets for two years and imposed a fine of Rs 25 lakh on each of them for alleged financial misstatement.

"The company is examining the order in detail and will seek appropriate legal remedies available," it said in an exchange filing.

Man Industries said the matters pertained to mainly on account of non-"consolidation of financial statements with Merino Shelters Pvt. Ltd (MSPL) and other procedural matters". MSPL, notably, is its wholly-owned subsidiary.

"The monetary penalty of Rs 25,00,000 is minimal compared to the company’s scale of operations and does not materially impact financials," it said in the regulatory filing.

Man Industries further said that the restraint directive will have no bearing on the core operation of the company, as it does not engage in securities market trading. The company also said that it is still examining the order in detail and will see appropriate legal remedies that are available.

"The company continues to remain fully operational with a strong order book of over Rs 4,700 crore," Man Industries further added.

In its order on Tuesday, SEBI noted that the financial statements of Man Industries for the financial years 2015-16 to 2020-21 were "deliberately misstated".

According to the market regulator, the misrepresentations, omissions, and concealments formed part of a scheme by which investors were deprived of the true financial picture of the company.

SEBI highlighted that MSPL was excluded from consolidation after fiscal 2015 without any explanation. This concealment, the order stated, suppressed group-level losses and liabilities while artificially inflating Man Industries' profits.

The business update was shared after market hours. The stock settled 10.50% lower at Rs 364 apiece on the NSE, compared to a 0.10% decline in the benchmark Nifty 50. The shares, earlier during the day, fell as much as 16.40% to Rs 340 apiece.

Man Industries' shares have risen 2.2% in the last 12 months and 11.11% year-to-date.