SEBI Bars Rana Sugars, Top Executives From Securities Markets For Two Years

The Securities And Exchange Board Of India barred Rana Sugars Ltd., its promoters and officials from the securities markets for two years on Tuesday and issued fines of Rs 63 crore on charges of diversion of funds.

The regulator also prohibited Managing Director and Promoter Inder Pratap Rana, Chairperson Ranjit Rana, besides Veer Pratap Rana, Gurjeet Rana, Karan Pratap Rana, Rajbans Kaur, Preet Inder Singh Rana and Sukhjinder Kaur from holding any position as director or key managerial person of any other listed company for two years.

Individually, SEBI imposed penalties in the range of Rs 3 crore to Rs 7 crore on Rana Sugars, its promoters, officials and other related parties.

"I find that noticee No 1 to 9, who are promoters of RSL and beneficiaries of such diversion of funds from RSL, have violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.

..also find that Noticee No 10 (Manoj Gupta), who was CFO and signed and certified such manipulated financial statements of RSL, aided and abetted such diversion of funds from RSL to its promoters and their family members violated PFUTP regulations,' SEBI's Chief General Manager G Ramar said in the final order.

The probe revealed that Rana Sugars failed to disclose Laxmiji Sugars Mills Co. as a related party in fiscal 2016–17. Further, the firm failed to disclose FTPL, CAPL, JABPL, RJPL and RGSPL as related parties.

Inder Pratap, Ranjit, Veer Pratap Singh Rana, were persons in charge of and responsible for the affairs of Rana Sugars and hence were charged with violating the LODR regulations.

SEBI also noted that the movement of funds between RSL and its related entities was not towards business advancement for the purchase of sugar cane seeds and repayment of unsecured loans.

Related parties are Flawless Traders Pvt., Century Agros Pvt., Jay Aar Builders Pvt., RJ Texfab Pvt Ltd. and RGS Traders.

These funds were then transferred by RSL to related parties on the same day to promoters of Rana Sugars and their family members.

The regulator found that related parties aided and abetted Rana Sugars, its promoters and directors to divert funds from RSL and violated PFUTP norms, the order said.

SEBI has directed Rana Sugars to recover Rs 607 crore from related entities, including 339 crore in receivables and Rs 268 crore in interest dues. The regulator also instructed Rana Sugars to take all necessary steps to recover these amounts and recommended appointing an independent law firm to work with the NSE for effective recovery efforts.

Additionally, Sebi observed that RSL, Inder Pratap Singh Rana, Ranjit Singh, Veer Pratap Singh, Gurjeet Singh, Karan Pratap Singh, and Rajbans Kaur have not provided any explanation for their failure to appear before the investigation authority.

They also failed to furnish information/documents sought by the IA, which hampered the investigation process, and hence violated Sebi norms.

The order came after SEBI investigated the affairs of RSL to examine the diversion of funds from the company by the promoters and promoter-related entities of Rana Sugars, and consequent misstatements in the financial statements of the company.

And whether the alleged diverted funds have been siphoned off by the promoters and promoter-related entities of the firm, resulting in violations of the provisions of PFUTP rules and LODR norms.

The investigation period was from fiscal 2014–15 to 2020–21.

(With Inputs From PTI)