Markets regulator Sebi has ordered forensic audit of Landmarc Leisure Corporation Ltd (LLCL) after finding prima facie evidence of misuse of books of accounts by the firm.
The trading curbs imposed on the firm, which figures among 331 'suspected shell companies' under Sebi's scanner, have also been removed.
In an interim order dated October 6, Sebi said "there is prima facie evidence of misuse of books of accounts/ funds by the company, even though there is no prima facie evidence of misrepresentation of financials" by LLCL.
"The persons who are in control of the company and the directors of the company are prima facie liable for action by Sebi and should not be permitted to exit the company at the cost of innocent shareholders," the regulator said.
As per the order, the regulator has directed BSE to appoint an independent forensic auditor to verify any misuse of the funds or books of accounts of LLCL as well as any misrepresentation including of financials and business of the firm.
Also, trading in the shares of the firm has been reverted to the status as it stood prior to issuance of letter dated August 7, 2017 by the Securities and Exchange Board of India (Sebi).
Landmarc Leisure Corporation Ltd is among the firms against whom Sebi initiated action on August 7 by ordering trading restrictions, following receipt of a list of 331 'suspected shell companies' from the government.
The ordered trade restrictions -- allowing trade only once a month and that too for only buy transactions with a 200 per cent security deposit -- were revoked in some cases a few days later following appeals filed by them with the Securities Appellate Tribunal, but Sebi was asked to continue with its probe and pass its orders expeditiously.
In the interim order passed against LLCL, Sebi noted that it prima facie appears that the firm has utilised the investors' money in a manner detrimental to the interests of minority shareholders.
Citing an instance, the regulator said LLCL has given assets worth Rs 15 crore to a related party "as an interest free security deposit which is outstanding for 12 years without any benefit to the shareholders of the company".
Also, LLCL has claimed its transaction was an arm's length transaction but has failed to provide any explanation for the same, Sebi said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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