Veerkrupa Jewellers and its Managing Director Chirag Arvind Shah have been barred from accessing the securities market for five years by the Securities and Exchange Board of India (SEBI). The market regulator also imposed a monetary penalty of ₹20 lakh on the director for alleged violations of securities laws. The order, received on June 4, 2026, restricts the entities from buying, selling, or dealing in securities directly or indirectly during the ban period.

The Quasi-Judicial Authority of SEBI found violations of Sections 12A(a), 12A(b), and 12A(c) of the SEBI Act. The order also cited breaches of multiple regulations under the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, specifically Regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(f), 4(2)(k), and 4(2)(r) read with Regulation 2(1)(c).

Details of the SEBI Order

The regulatory action targets both the company and its director for the alleged contraventions. The penalty under Section 15HA of the SEBI Act was levied solely on Mr. Chirag Arvind Shah.

In its disclosure to the stock exchange, Veerkrupa Jewellers stated that the impact on its financial or operational activities is not quantifiable (NA) at this stage. The disclosure was submitted under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Veerkrupa Jewellers reported a net profit of ₹16.65 lakh for the financial year ended March 31, 2026, compared to ₹19.92 lakh in the previous year. Revenue from operations for FY26 stood at ₹5,933.81 lakh, a significant increase from ₹2,925.67 lakh in FY25. The company's board approved the standalone audited financial results for the half-year and full year ended March 31, 2026, in a meeting held on May 30, 2026.

Statutory auditors M/s Shah Karia & Associates issued a qualified opinion on the financial results. The auditors cited the company's failure to maintain proper and updated books of account and financial records as required under applicable regulations. They noted that the absence of complete records and internal control tracking prevented them from verifying the completeness and accuracy of financial transactions.

The audit report highlighted material unexplained variances between the tax balances recorded in the books and the corresponding Goods and Services Tax (GST) portals. Specifically, discrepancies were found between the input tax credit claimed, output tax liabilities recorded, and the balances in the GST portal. The auditors stated they could not determine the potential tax liabilities, interest, or penalties arising from these unreconciled figures.

Inventory records were also flagged for lacking item-wise identification and precise valuation data. Management's valuation of inventory, totaling ₹1,718.10 lakh, relied on estimates rather than formal documentation or physical verification. Additionally, the auditors were unable to obtain independent external confirmations for trade receivables and trade payables, leaving them unable to determine if adjustments to these carrying values were necessary.

In response to the qualifications, the company's management asserted that it maintains adequate internal controls for daily accounting. It stated that balances with GST returns are duly reconciled and that it will contact the auditor to resolve the discrepancies. Regarding inventory, the management noted that maintaining records gram-wise is standard, though item-wise maintenance is difficult. The company confirmed that trade receivables and payables have been verified by management and estimated that there is no financial impact from the qualifications.

Financial Performance for FY26

The company's total expenditure for the year rose to ₹5,928.57 lakh from ₹2,903.30 lakh in the prior year. Profit before tax for FY26 was ₹10.24 lakh, down from ₹22.40 lakh in FY25. Earnings per share (EPS) for the year stood at ₹0.01, compared to ₹0.02 in the previous year.

Assets and Liabilities

The company's total assets as of March 31, 2026, were ₹2,177.24 lakh, a decrease from ₹2,264.07 lakh in the previous year. Current investments decreased to ₹1,718.10 lakh from ₹1,795.60 lakh, while inventories increased to ₹313.76 lakh from ₹212.64 lakh. Short-term borrowings reduced to ₹793.57 lakh from ₹886.77 lakh. Share capital remained unchanged at ₹1,310.53 lakh.