SEBI cracks down on Dhenu Buildcon for alleged roundtripping scam involving ₹1000 crore

SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days

Source

The Hindu — Business →

Quick Revision

Prelims-testable facts

01SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days.
02The regulator has barred Dhenu Buildcon from corporate actions until further orders.
03SEBI alleged that circular fund flows created the appearance of ₹1000 crore in loans before about ₹840 crore was converted into Dhenu Buildcon shares.
04The alleged unsecured loan was created in December 2024.
05SEBI alleged that Dhenu Buildcon used a network of connected entities to recycle ₹25 crore repeatedly, creating a ₹1000 crore loan trail.
06The regulator penalized Dhenu Buildcon for roundtripping funds and converting loans to equity.
07Dhenu Buildcon was barred from capital markets due to key figures being barred from the same.

Trap alerts

Most people think SEBI only deals with stock market regulation, but actually SEBI has broader powers to regulate corporate actions and protect investors.
Most people think roundtripping is a complex financial transaction, but actually it can be simply defined as the practice of converting loans to equity to artificially inflate a company's value.

Prelims Practice MCQs

Single facteasy

SEBI alleged that Dhenu Buildcon created a loan in its books through how many transactions over eight days?

A.46 transactions
B.40 transactions
C.50 transactions
D.60 transactions

SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days. This is a significant financial irregularity.

Statement I & IIhard

Consider the following two statements: Statement-I: SEBI alleged that Dhenu Buildcon created a ₹1000 crore unsecured loan in the books through 46 transactions over eight days. Statement-II: Round-tripping is a financial practice where a company creates a loan in its books through a series of transactions, and SEBI alleged that Dhenu Buildcon was involved in such a practice. Which one of the following is correct in respect of the above statements?

A.Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
B.Both Statement-I and Statement-II are correct but Statement-II is not the correct explanation for Statement-I
C.Statement-I is correct but Statement-II is incorrect
Statement-I is incorrect but Statement-II is correct

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