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Informist, Wednesday, Apr. 1, 2026

MUMBAI – The Securities and Exchange Board of India has banned Elitecon International Ltd., its managing director, and four others from the securities market for manipulating the share price of the company. SEBI found that the company put out misleading disclosures that led to a jump in the stock price and its officials knowingly withheld information about key issues, which otherwise would have pushed the stock price down.

Elitecon is in the business of manufacturing and trading tobacco-based products. SEBI found discrepancies in its earnings after visiting the company's manufacturing plant and warned its revenues might be inflated. Owing to this, SEBI will appoint a forensic auditor to look into the accounts of the company.

Elitecon's promoter and Managing Director Vipin Sharma and a few others made unlawful gains by selling their shares at inflated prices, which were influenced through misleading disclosures, SEBI said in an interim order. The regulator also issued directions to impound INR 498.41 million from Sharma, and asked four others, who were involved in manipulating the stock price, to deposit unlawful gains of INR 14.22 million. On Monday, shares of the company closed at INR 48.38 on the BSE, down nearly 5%. 

SEBI found that the company withheld information about several notices from tax authorities and delayed their disclosure to prevent a decline in the stock price. The company got notices to pay over INR 4 billion to tax authorities, but this was not clearly disclosed initially and only disclosed in detail months after receiving the notices, the order said. Further, the company tried to prevent a decline in the stock price by timing the disclosure of tax notices with other positive announcements such as plans of fund raising and buying an international entity.

"...only positive announcements or misleading announcements designed to influence the decision of investors to purchase shares were being published on website and no information interalia pertaining to the GST SCNs, sealing of registered office premises by GST authorities, seizing of certain inventories by FDA during the inspection, service of Contempt of Court Notice, etc. were provided by the company on this portal," the order said.

In one instance, the company announced it got a contract to supply cigarettes and other products worth INR 8.75 billion to a company called Yuvi International. However, SEBI found Yuvi's website had no mention that it was in the tobacco business.

SEBI's visit to the company's manufacturing plant in Nashik even raised doubts about its financials. An analysis of electricity consumption at the facility showed it had declined over several quarters, which didn't support the sharp rise in revenue. The company's consolidated revenue for the September quarter had jumped 27 times on year to nearly INR 22 billion.

"...the company claimed that a "state-of-the-art" automated facility was established at its Nashik site, however, on-site visits and GST SCN (show cause notice) revealed that the machinery was obsolete and largely non-operational," the order said. "...the company repeatedly made tall claims about its functioning but in reality, it was grappling with SCNs, sealed registered office premises, seizure of its machinery, etc."  End

Reported by Anshul Choudhary

Edited by Avishek Dutta

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