Sebi said in its summons to SecureKloud’s directors that there is “reasonable ground” to believe that the financial statements of the company in 2019 were prepared in a manner that was detrimental to investors. The regulator also alleged the company may have violated various other securities norms.
In response to ET’s query, a company spokesperson said the company has been cooperating with the regulator to conclude the audit and has disclosed it to shareholders.
“The regulator sought an in-person meeting with the directors and the management three months back to get their views on this case. The company has provided the sought information and is cooperating with the regulator to conclude the audit.”
Sebi did not respond to ET’s query until press time.
Sebi had separately asked Suresh Venkatachari, chairman & CEO; Rama Ramani Subra, former CFO; Srinivasan Ravi Chandran, whole-time director; Lakshmanan Kannappan, director and COO; and two independent directors – Dinesh Raja Punniamurthy and Babita Singaram – to appear before it.
In November 2019, the company’s auditor Deloitte resigned after informing the government about suspected fraud. While auditing the company’s standalone and consolidated financial statements for the year ended March 31, 2019, Deloitte found inconsistencies in declarations provided by the directors and information available in the public forum. The audit firm suspected related party transactions may not have been disclosed previously.
Deloitte also highlighted multiple addresses were used in various communications with certain customers in invoices, websites, and cheques received.
In 2021, the company changed its name from
Services to SecureKloud Technologies.
8K Miles Software was once a darling of retail investors with its stock rallying over 15,000% between 2012 and 2017. During the period, it rose from a low of ₹6.62 in April 2012 to a high of ₹987.90 in November 2017. After that, the stock plunged 91% and is currently trading at ₹86.35.
The company’s revenue declined 54% in FY20 from ₹842 crore in FY19 to ₹382 crore. The company reported a net loss of ₹502 crore in FY20 compared to a profit of ₹69 crore in FY19. In the quarter ended June 2019, the company revised its accounting policy on intangibles, resulting in a one-time write-off of ₹486 crore.