SynopsisSebi has restrained Kore Digital and three key executives after finding prima facie evidence of misstated financials, questionable subsidiaries, suspicious accounting and alleged diversion of preferential issue proceeds. The regulator also blocked main-board migration and ordered a forensic audit of company records.

AgenciesSebi restrained Kore Digital executives and restricted market access after finding prima facie evidence of financial misstatements, questionable subsidiaries and alleged accounting irregularities. Capital markets regulator Sebi has passed an interim order against SME-listed Kore Digital and three of its key managerial personnel after a probe found prima facie evidence of manipulated financial statements, allegedly non-genuine subsidiaries, suspicious accounting entries and diversion of preferential issue proceeds.

Sebi has restrained managing director Ravindra Doshi, chief executive officer Chaitanya Doshi and chief financial officer Kashmira Doshi from buying, selling or otherwise dealing in Kore Digital shares until further orders. The regulator has also barred the company and the three individuals from accessing the securities market to raise money from the public.

Sebi also directed NSE not to allow Kore Digital to migrate from the NSE Emerge SME platform to the main board until it receives regulatory clearance. A forensic auditor will be appointed to examine the company's books from the date of its listing in June 2023 until March 31, 2026.

At the centre of Sebi findings are three companies acquired by Kore Digital — Franken Telecom, Wolter Infratech and KDL Realinfra — whose revenues were subsequently consolidated into Kore's financial statements. The regulator said these subsidiaries and their step-down subsidiaries accounted for a large part of Kore's reported growth.

27 crore in FY23 to Rs 408 crore in FY26. On average, around 75% of consolidated revenue came from subsidiaries.

3 crore during FY25 and FY26, representing roughly 73% of its total revenue over the period. The regulator noted that the three subsidiaries had been incorporated only months before Kore acquired them.

They shared the same registered address and had either little or no filing history with the Ministry of Corporate Affairs. GST registrations of Franken and Wolter were cancelled shortly after registration, while KDL Realinfra's registration became inactive on the same day it was registered, according to the order.