SEBI bars Kore Digital, directors over Rs 541 crore revenue misstatement

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has passed an interim ex-parte order restraining Kore Digital Limited and three of its directors from the securities market, citing prima facie manipulation of the company's financial statements. The order, numbered WTM/KV/CFID/CFID-SEC1/32724/2026-27 and dated 17 September 2026, was passed by Whole Time Member Kamlesh Chandra Varshney under Sections 11(1), 11(4) and 11B read with Section 19 of the SEBI Act, 1992.

The regulator named four noticees: Kore Digital Limited (PAN AADCK9543J); Ravindra Doshi, the Managing Director and promoter; Chaitanya Doshi, Director and Chief Executive Officer; and Kashmira Doshi, the Chief Financial Officer. Kore was listed on the SME (Emerge) platform of the National Stock Exchange on 14 June 2023. SEBI says its examination began as a review of how the company had used its initial public offering proceeds.

At the centre of the order is a single figure: revenue "to the extent of INR 541.3 cr", which SEBI states was mis-stated during FY2024-25 and FY2025-26, amounting to roughly 73% of the company's reported revenue over that period. The order records that revenue from operations rose from about Rs 21.27 crore in March 2023 to Rs 408 crore by March 2026, with an average of around 75% of that revenue derived from recently acquired subsidiaries.

Kore has denied the core allegation. In a reply dated 17 August 2026 recorded in the order, the company submitted that the preferential-issue proceeds were "utilized for business purposes and legitimate commercial transactions" and said it did not agree that the entities concerned were non-genuine.

How the Scheme Worked

According to the order, the alleged inflation ran along two tracks. On a standalone basis, SEBI found that Kore booked revenue against invoices raised to NECL, Vodafone and Airtel to the extent of about Rs 31.49 crore across FY2023-24 and FY2024-25, and a further Rs 26.42 crore against an entity named Kashvee Infra Projects Private Limited in FY2024-25. The order states that NECL confirmed no invoice had been issued to it by Kore in the quarter ending September 2024, and that Kore later reversed inflated revenue by issuing credit notes.

The larger track, per the order, ran through subsidiaries. In a corporate announcement dated 6 January 2025, Kore said it had acquired 98% stakes in three companies - Franken Telecom Private Limited, Wolter Infratech Private Limited and KDL RealInfra Private Limited. SEBI states that the GST registration of Franken and Wolter had already been cancelled, and KRPL had not registered for GST at all, around the time of the announcement, and that surprise site visits carried out by NSE found no such entities at the given addresses. The order describes the acquisitions as "fake and non-genuine".

On the fund-raising, the order records that an extraordinary general meeting on 22 February 2024 approved a preferential issue, and that around Rs 40.05 crore was raised in March 2024 (Rs 38.80 crore in shares and Rs 1.25 crore in warrants), for the stated objects of working capital and business expansion. SEBI's table of fund utilisation shows Rs 7.52 crore transferred to SD Square Manpower Private Limited, Rs 4.62 crore to Kashvee Infraprojects, and about Rs 25.29 crore "routed through multiple account of Kore". The order says the majority of the proceeds moved to SD Square and Kashvee, both of which it describes as non-genuine, and notes that Ravindra Doshi was a director and shareholder of Kashvee and an authorised signatory of a Kashvee bank account.

The order also traces how corporate announcements moved the share price. It records, for example, a results announcement in August 2024 preceding a rise to a high of Rs 2,856 within a few weeks, conduct SEBI says "distorted the natural price discovery mechanism" and misled investors dealing in the scrip.

The Law Invoked

The interim order is passed under Sections 11(1), 11(4) and 11B of the SEBI Act, 1992, the provisions that let SEBI issue directions to protect investors pending investigation, read with Section 19 on delegation of powers. SEBI records prima facie violations of Section 12A(a), (b) and (c) of the Act, which prohibit the use of manipulative and deceptive devices in dealing with securities.

On the regulations, the order finds Kore prima facie in breach of Regulations 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(f), 4(2)(k) and 4(2)(r) of the PFUTP Regulations, 2003, which bar fraudulent and unfair trade practices, including the publication of misleading information. It also cites Regulations 4(1)(c), (e), (g), (h), (j) and 4(2)(e)(i) of the LODR Regulations, 2015, on accurate and complete disclosure to the exchanges.

The three individuals are held prima facie liable under Section 27 of the SEBI Act, which fixes responsibility on persons who were in charge of the conduct of a company's business, and in violation of specified sub-clauses of Regulation 4(2)(f) of the LODR Regulations concerning the duties of key managerial personnel.

What Happens Next

Because this is an interim ex-parte order, it is a first step and not a conclusion. The directions state they "shall remain in force until further orders". The noticees have been given 21 days from receipt of the order to file replies or objections and to seek a personal hearing. SEBI has said it will appoint a forensic auditor to examine Kore's books from the date of listing to 31 March 2026, and a detailed investigation is to follow.

Under the operative directions, all four noticees are restrained from accessing the securities market through any prospectus, offer document or advertisement; the three directors are separately restrained from buying, selling or dealing in Kore's shares; and NSE has been directed not to allow Kore to migrate from its Emerge platform to the mainboard without SEBI's clearance. A copy of the order has also been forwarded to the National Financial Reporting Authority in relation to the company's statutory auditors.

An interim SEBI order is appealable to the Securities Appellate Tribunal under Section 15T of the SEBI Act. The prima facie findings recorded here are not final determinations of wrongdoing; they are subject to the reply process, the forensic audit and the investigation SEBI has ordered, and remain allegations until those proceedings conclude.

What It Means

For retail investors, the order is a reminder that a fast-rising revenue line, especially one driven by newly acquired subsidiaries, deserves scrutiny rather than celebration. SEBI's own trigger here was a mismatch between a company's standalone and consolidated numbers, something any investor can read straight from published results.

The practical protections are straightforward. Anyone can verify whether an entity is a registered, active company through the Ministry of Corporate Affairs portal, and whether a GST registration is live through the GST portal - two checks that feature prominently in this order. For listed SME stocks in particular, consolidated revenue that is overwhelmingly generated by recently acquired private companies is a pattern worth questioning before, not after, buying.

For existing shareholders of Kore, the restraint does not by itself freeze their holdings, but the bar on dealing applies to the named directors, and the stock now trades under the overhang of a pending forensic audit and investigation. An interim order does not settle a company's underlying value on its own; it flags a risk that the market must now price with far more information than it had before.

FAQ

What exactly did SEBI order?

SEBI passed an interim ex-parte order dated 17 September 2026 restraining Kore Digital Limited and three directors from accessing the securities market, and separately barring the three directors from dealing in Kore shares. It also blocked Kore's proposed move to the NSE mainboard and ordered a forensic audit of the company's books. The directions remain in force until further orders.

Are SEBI's findings final?

No. SEBI has recorded only prima facie findings made pending investigation, not final conclusions or any finding against the noticees. The noticees have 21 days to reply and may seek a personal hearing, and the matter is subject to a forensic audit and a detailed investigation before SEBI passes any final order. Until then, these remain allegations tested through due process.

Can the order be appealed?

Yes. An interim order of SEBI can be challenged before the Securities Appellate Tribunal under Section 15T of the SEBI Act. Separately, the noticees may file objections with SEBI within 21 days of receiving the order and request a personal hearing before the Whole Time Member who passed it.

How can I check whether a company or its subsidiaries are genuine?

Company registration and filing status can be checked on the Ministry of Corporate Affairs portal, and GST registration status on the GST portal. In this matter SEBI relied on cancelled GST registrations and site visits that found no operations at registered addresses. These are checks that retail investors can broadly replicate for themselves.

Where can I read the official order?

The full 81-page interim order is published on SEBI's website under its enforcement orders for September 2026, in the matter of Kore Digital Limited. It is linked at the end of this report.

This report is based on the official SEBI interim order dated 17 September 2026 in the matter of Kore Digital Limited. It was surfaced via coverage in The Economic Times.