Dalmia Bharat Denies SFIO Report Allegations on Mutual Fund Unit Transfer
Dalmia Bharat Limited denies media reports about an SFIO investigation into fraudulent transfer of its subsidiary's mutual fund units. The company states that its subsidiary's demat account was misused by Allied Financial Services, and regulatory bodies like SEBI and EOW have taken action against Allied and ISSL. The Supreme Court has ordered the release of funds to the subsidiary.
The allegations, even if denied, involve regulatory investigations and potential fraud, which could impact investor confidence and the company's reputation. However, the company states it has not received the SFIO report and has already taken steps to address the issue, including legal recourse and recovery of funds.
The announcement addresses allegations of fraud and misappropriation of funds, which are inherently negative. Although the company denies the reports, the nature of the allegations itself casts a negative light.
Dalmia Bharat Limited (DBL) has issued a denial regarding recent media reports concerning an SFIO (Serious Fraud Investigation Office) report about the fraudulent transfer of mutual fund units of its subsidiary, Dalmia Cement (Bharat) Limited (DCBL), by Allied Financial Services Private Limited (Allied).
DBL clarified that DCBL had opened a demat account with Allied, a depository participant, which subsequently misappropriated securities. DCBL had lodged complaints with SEBI, NSE, NSDL, and EOW. An FIR was registered by EOW in March 2019, and a chargesheet filed by Delhi Police indicated misappropriation by Allied in connivance with IL&FS Securities Services Limited (ISSL).
SEBI's investigation also found that Allied had misappropriated Dalmia Group's securities for its own trading, imposing penalties and restraining Allied and ISSL from accessing the securities market. SFIO Mumbai, investigating ISSL, filed complaints stating that ISSL provided irregular benefits to Allied, enabling the misuse of DCBL's securities.
The Supreme Court, in August 2019, ordered the release of the mutual funds to DCBL. DBL stated that the Bawri Group, involved in a commercial dispute with DCBL, initiated the MCA's investigation by SFIO in 2019. DBL has not received any SFIO report and believes the published news is speculative and motivated, noting that no clarification was sought from the company prior to publication.
DBL reiterated its commitment to conducting business in compliance with laws and maintaining high standards of corporate governance and transparency.
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Dalmia Bharat Limited filed this with the NSE as a statutory disclosure, categorised under other regulatory filings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Dalmia Bharat Limited. Read the original for the full detail.