Mishtann Foods shares tank 20% as SEBI bars fundraising for 7 years over Rs 100 crore misappropriation

Shares of Mishtann Foods plunged 20 per cent on December 6 after SEBI prohibited the company from raising public funds for 7 years.

The market regulator accused Mishtann Foods of serious financial misrepresentation and ordered it to recover Rs 100 crore allegedly misappropriated or diverted through group entities and promoters.

In an interim order, SEBI highlighted that Rs 49.82 crore from the company’s rights issue was misused through group entities, while Rs 47.10 crore was diverted to promoters and their relatives via fictitious transactions. Mishtann Foods' managing director and several directors have also been barred from accessing the securities market until further notice.

Responding to the allegations, the company denied all charges and termed SEBI's interim order as a show-cause notice. Mishtann Foods stated it would pursue legal remedies and provide clarifications through its compliance team.

SEBI’s order, issued by Whole-time Member Ashwani Bhatia, underscored how the MD, Hiteshkumar Patel, leveraged over 90 per cent of bank transactions among group entities for fraudulent activities, putting at risk the interests of over 4.2 lakh shareholders.

The stock closed at its lower circuit limit, reflecting investor concerns over the regulatory action.