New Delhi, Sep 9: The Income Tax Department has launched its first set of prosecutions in the Panama Papers investigations. Market regulator Securities and Exchange Board of India (SEBI) suspected 331 shell companies with the ordered of forensic audit of Hit Kit Global Solutions Ltd (HKGSL) as books of accounts and its submissions were not matching.
Few days ago, SEBI had ordered forensic of two other such companies – Kavit Industries and GV Films.
“Also, there is lack of documents to substantiate the transactions entered into by the company”, it added.
SEBI Interim OrderThus, even though there is no prima facie evidence of misrepresentation or misuse of books of accounts/funds by the company, it is imperative that in the interest of investors, the financials of the company be independently audited to establish their genuineness.
The regulator also imposed restrictions on promoters and directors of the company to use the powers and stop the HKGSL for trading in the letter dated August 7 by SEBI.
In the 13-page order, SEBI observed that the financials of the company are dominated by “long term loans and advances” of Rs 9.65 crore as on March 31, 2016 as against the networth of Rs 9.73 crore as on March 31, 2016.
“From the loans and advances certain amounts of Rs 5.84 crore has been shifted to capital work-in progress and Rs 3.87 crore has been shifted to other current assets in year 2016-17 as shown in balance sheet of FY 2016-17,” SEBI said.
SEBI received the list from the government on June 9, where it was found the companies to be shell companies, involved in misrepresentation of the accounts and violation of business guidelines.
Highly misusing of books of accounts and funds of the companies including by facilitating “accommodation entries to the detriment of minority shareholders”, thus reneging on the fiduciary responsibility cast on the board, controlling shareholders and the key management personnel.