Description

SEBI settlement order resolving adjudication proceedings against Delphi World Money Limited for alleged financial misstatements and non-disclosure of related party transactions in FY 2018-19.

Summary

SEBI issued Settlement Order No. SO/JS/DP2025-26/7884 in the matter of Delphi World Money Limited (PAN: AABCC7143A) pursuant to Settlement Application No. 7884/2024. The proceedings arose from an NSE examination report on the company’s deteriorating financials, which triggered a SEBI investigation for FY 2018-19. The company sought and obtained settlement of the adjudication proceedings.

Key Points

  • SEBI investigated Delphi World Money Limited for FY 2018-19 based on an NSE referral regarding deteriorating financials.
  • The company allegedly misclassified a ₹26.70 crore gain on sale of FVOCI (Fair Value through Other Comprehensive Income) equity investments by routing it through the Statement of Profit and Loss under ‘other income’ rather than through Other Comprehensive Income (OCI) as required by Ind AS 109.
  • This misclassification caused the company to report a ₹18.35 crore loss before tax instead of the correct ₹45.05 crore loss before tax, and converted a loss from continuing operations into an apparent profit.
  • The company also allegedly failed to disclose a Related Party Transaction (RPT) involving the sale of a wind farm in Maharashtra to Karma Energy Limited, a promoter-group listed company.
  • Alleged violations include LODR Regulations 4(1)(a), 4(1)(b), 4(2)(e)(i), 33(1)(c), 34(3), and 48, as well as SEBI PFUTP Regulations 2003 and the SEBI Act, 1992.
  • The matter was resolved through the settlement mechanism under Settlement Application No. 7884/2024.

Regulatory Changes

No new regulatory changes introduced. This order applies existing LODR Regulations and PFUTP Regulations to financial reporting and disclosure obligations.

Compliance Requirements

  • Listed companies must classify gains/losses on equity investments designated at FVOCI strictly through Other Comprehensive Income per Ind AS 109; such gains cannot be routed through the Statement of Profit and Loss.
  • All related party transactions, including asset sales to promoter-group entities, must be disclosed in accordance with LODR Regulations.
  • Financial statements must accurately represent profit/loss from continuing operations without misclassification of investment gains.

Important Dates

  • Investigation Period: FY 2018-19
  • Settlement Application No.: 7884/2024
  • Settlement Order No.: SO/JS/DP2025-26/7884
  • Order Date: February 2026

Impact Assessment

This is a company-specific enforcement action with limited broader market impact. The settlement resolves historical violations by Delphi World Money Limited related to Ind AS 109 non-compliance and RPT non-disclosure. The case reinforces SEBI’s scrutiny of financial statement accuracy and related party disclosures for listed entities. The ₹26.70 crore misclassification significantly distorted reported profitability (turning a ₹45.05 crore loss into an apparent ₹18.35 crore loss), highlighting audit and compliance risks in application of fair value accounting standards.

Impact Justification

Company-specific enforcement action resolved via settlement; involves financial statement misrepresentation of ₹26.70 crore and RPT non-disclosure, but limited to historical FY 2018-19 conduct with no broad market-wide regulatory change.