According to Sebi’s order, the company did not seek any essential dispensation from KMP requirements or give appropriate projections in terms of Indian AS1 (Accounting Standard 1) during the compilation of its books of accounts on a going concern basis. Moreover, Kundu has not followed SOP while appointing employees, has not designated a few employees as KMP, and has given a clean bill of health to the exchange’s two officials, Kundan Zamvar and Kunal Sanghavi, despite knowing that their names were highlighted in anomalies concerning mismanagement in the uTrade contract.

And despite the fact that Bhansali saw both Zamvar and Sanghavi’s names highlighted in anomalies, he still granted them a clean bill of health. The Securities and Exchange Commission fined MSEI, Kundu, and Bhansali a total of Rs 8,000,000 (about $1.4 million) because their actions were in violation of the Securities Contracts laws.

The actions Kundu has taken since joining MSEI, as well as those he and Bhansali have done to try and revive the exchange, have been taken into account as a mitigating factor, according to the regulator. Over the course of July 2019–July 2021, Sebi received multiple complaints alleging irregularities on the part of MSEI’s management. In light of these accusations, the regulator recommended that the bourse hire a forensic auditor to check out MSEI’s allegations.

In addition, the Forensic Audit Report (FAR) recommended that the MSEI Governing Board take appropriate action against the entities/persons implicated in the malpractices. In June, three people resolved with Sebi over suspected violations of Securities Contracts regulations in the matter of former officers of MSEI. The settlement sum was over Rs 33 lakh.

Balu Nair, who was serving as interim CEO of MSEI at the time of the alleged violation, Kunal Sanghavi, who served as CFO of the bourse at the time, and Kundan Zamvar, who served as Vice President – IT and Chief Information Security Officer (CISCO), all reached a settlement in the matter.

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