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Blue Coast Hotels Ltd and its promoter and whole-time director Kushal Suri have settled a case with the Securities and Exchange Board of India after paying a combined settlement amount of INR 89.3 lakh. The settlement relates to alleged violations of disclosure and accounting norms identified in the company's financial statements between FY19 and FY22. The action followed an examination report submitted by the National Stock Exchange, which highlighted several irregularities. SEBI's investigation found that the company failed to disclose a significant contingent liability linked to refunds for space buyers in its stalled Aerocity project. Following the settlement, SEBI has closed the adjudication proceedings, while reserving the right to take further action if required.
Blue Coast Hotels Ltd and its promoter and whole-time director Kushal Suri have settled a case with markets regulator the Securities and Exchange Board of India (SEBI) over alleged violations of disclosure norms after collectively paying INR 89.3 lakh as settlement charges. The settlement was announced earlier this week. Advertisement
The resolution followed applications submitted by Blue Coast Hotels Ltd and Kushal Suri seeking to settle the proceedings initiated against them without admitting or denying the findings of fact or conclusions of law. SEBI accepted the settlement proposal and disposed of the adjudication proceedings after receiving the settlement amounts.
The matter originated after the National Stock Exchange submitted an examination report that highlighted multiple irregularities in the company's financial statements for the period from FY19 to FY22. Based on the findings, SEBI conducted a detailed investigation into the affairs of Blue Coast Hotels Ltd and its key officials, including its chief financial officer and promoter.
The investigation found that the company failed to record a contingent liability amounting to INR 318.95 crore related to refunds payable to space buyers in connection with its failed Aerocity real estate project. SEBI noted that a Delhi High Court order issued in 2018 had directed the company to make the refund payments. Despite this, the liability was not disclosed in the company's financial statements until FY23.
According to SEBI, the delayed disclosure amounted to a breach of the Listing Obligations and Disclosure Requirements regulations, as well as Indian Accounting Standards, including Ind AS 1 and Ind AS 37. The regulator also held Kushal Suri accountable for the acts and omissions of Blue Coast Hotels Ltd, citing non-compliance with disclosure rules and accounting norms.
Following the investigation, SEBI issued a show-cause notice to the applicants earlier this year. Settlement applications were filed in the past year, after which Blue Coast Hotels paid INR 78 lakh, while Kushal Suri paid INR 11.37 lakh on a joint and several basis.
SEBI stated that it will not initiate enforcement proceedings in relation to the settled violations but retained the right to take further action in the event of any misrepresentation or breach of settlement terms.
Source - PTI
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