The Securities and Exchange Board of India (SEBI) barred Kore Digital and three of its key executives from the securities market on September 17 after finding prima facie evidence of an alleged ₹541.3 crore financial misstatement, questionable subsidiaries, suspicious accounting entries and diversion of preferential-issue proceeds. The regulator also blocked the company’s planned migration from the NSE SME platform to the mainboard and ordered a forensic audit of its books.
SEBI’s interim order restrains managing director Ravindra Doshi, chief financial officer Kashmira Doshi and chief executive Chaitanya Doshi from buying, selling or dealing in Kore Digital securities, directly or indirectly, until further orders. The flagged misstatements span the 2025 and 2026 financial years and represent approximately 73% of the company’s reported consolidated revenue during that period, according to the regulator’s findings. The matter has also been referred to the National Financial Reporting Authority (NFRA) for examination of the statutory auditors’ role.
What Triggered SEBI’s Action Against Kore Digital?
SEBI’s investigation flagged discrepancies in Kore Digital’s consolidated financial statements, questionable subsidiary structures used to inflate reported revenue, and alleged diversion of funds raised through a preferential issue away from its stated purpose. The scale of the alleged misstatement, at roughly three-quarters of reported revenue, is unusually large even by the standards of SME-platform enforcement actions, prompting SEBI to move quickly to block the company’s mainboard migration before further capital could be raised from public investors.
What Does the Forensic Audit Cover?
SEBI has directed the appointment of a forensic auditor to scrutinise Kore Digital’s books of accounts from the date of its listing through March 31, 2026, a scope that will examine revenue recognition practices, related-party transactions and the use of preferential-issue proceeds. The forensic audit findings will determine whether SEBI proceeds to a final order with monetary penalties, disgorgement of allegedly diverted funds, or referral for further investigation.
What Do Market Analysts Say?
Governance analysts note that SEBI’s swift interim action, taken before a full forensic audit was complete, reflects a more proactive enforcement posture toward SME-platform companies seeking mainboard migration, an area regulators have flagged as vulnerable to inflated valuations and weak disclosure standards. The NFRA referral for the statutory auditors adds a second layer of accountability, signalling that SEBI wants audit-quality failures, not just company-level misconduct, examined as part of the case.
Market and Trade Reaction
Kore Digital’s SME-platform listed shares faced heightened selling pressure following the order, with retail investors who had participated in the company’s earlier fundraising rounds expressing concern over potential losses pending the forensic audit outcome. The action has also renewed broader market debate over disclosure standards on the SME platform, with some brokerages calling for tighter pre-migration scrutiny of companies seeking to move to the mainboard.
What Happens Next?
The forensic auditor’s findings, once submitted to SEBI, will determine the regulator’s final order, which could range from monetary penalties and disgorgement to a longer market ban for the restrained executives. Kore Digital and its executives can respond to SEBI’s interim order and seek a hearing before any final directions are issued, a process that typically takes several months for cases of this complexity.
Frequently Asked Questions
What did SEBI find in the Kore Digital investigation?
SEBI found prima facie evidence of an alleged ₹541.3 crore financial misstatement, representing about 73% of reported consolidated revenue, along with questionable subsidiaries and alleged diversion of preferential-issue proceeds.
What action has SEBI taken against Kore Digital’s executives?
SEBI has restrained MD Ravindra Doshi, CFO Kashmira Doshi and CEO Chaitanya Doshi from dealing in Kore Digital securities and blocked the company’s migration from the SME platform to the mainboard.
What happens with the forensic audit?
SEBI has ordered a forensic audit of Kore Digital’s books from its listing date to March 31, 2026, which will inform the regulator’s final order on penalties or further action.
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