Shares of Man Industries (MIIL) declined sharply by 16% to an intraday low of ₹340.90 on Tuesday, after the Securities and Exchange Board of India (Sebi) barred the company and three of its senior executives from accessing the securities market for two years.

Sebi, in an order dated September 29, inter alia, alleged diversion of funds to subsidiaries and non-consolidation of financial results of the subsidiary company to hide losses. Based on a complaint, a forensic auditor was appointed on November 22, 2021, to assist Sebi in conducting a forensic examination of the books of accounts of MIIL for FY 2014-15 to FY 2020-21.

In the same order, Sebi imposed a penalty of ₹25,00,000 on the company, as well as the three noticees: Ramesh Mansukhani, chairman & director; Nikhil Mansukhani, managing director; and Ashok Gupta, ex-chief financial officer of Man Industries. Sebi has further restrained the top executives from accessing the securities market for a period of two years from the date of the order.

Man Industries, acknowledging the notice, issued an exchange filing, stating that the company is examining the order in detail and will seek appropriate legal remedies available against it.

The company also stated that the penalty would not affect the operations of the company. “The effect is minimal in nature when compared to the size and operations of the company and has no impact on the day-to-day functioning of the business. The company continues to have a strong order book of over ₹4,700 crore and remains fully operational. The company does not engage in any trading activity in securities markets, and therefore, the directions relating to restraining from accessing the securities market have no impact on its core business operations,” the statement read.

The stock is currently trading at ₹362.15, down by 10.95% from Monday’s closing. The shares have declined more than 19% in the past five trading sessions but have risen by 31% over six months and 12.8% on a year-to-date basis.