Kore Digital's revenue growth story looked extraordinary on paper.
But SEBI's investigation found that approximately 75% of this consolidated revenue came from three subsidiaries: Franken Telecom, Wolter Infratech, and KDL Realinfra. Without their contribution, Kore Digital's standalone revenue would have fallen below the threshold required for migration to the mainboard in several periods. This heavy reliance on subsidiaries raised immediate questions about whether the growth was organic or manufactured through acquisitions.
The accounting entries that triggered this red flag involved consolidating financial statements from subsidiaries that SEBI found to be non-genuine. Additionally, standalone financial statements were allegedly inflated by Rs 31.49 crore through transactions involving Navayuga Engineering Company Limited, Vodafone, and Bharti Airtel, and by Rs 26.42 crore through Kashvee Infra Projects Pvt Ltd during FY25.
What made SEBI suspicious wasn't just the numbers—it was the subsidiaries themselves.
Kore Digital acquired 98% stakes in all three shortly after their incorporation. All three shared the same registered address and had either little or no filing history with the Ministry of Corporate Affairs.
The GST registrations told an even more damning story. Franken Telecom and Wolter Infratech had their GST registrations cancelled shortly after registration. KDL Realinfra's registration became inactive on the very same day it was registered. For companies that were supposedly generating substantial revenue—contributing 75% of consolidated revenue—the absence of active GST registrations was inexplicable. The GST department informed SEBI that it was in the process of cancelling Kashvee Infra's registration due to absence of genuine business activity.
When NSE conducted surprise site visits in June 2026, investigators failed to establish the presence of these companies at their stated addresses. Similar findings were recorded for several step-down subsidiaries and entities that had financial transactions with Kore. The complete absence of physical operations at entities contributing hundreds of crores in revenue was the smoking gun.
The audit records raised even more alarms. CA Riya Goyal, whose name appeared on financial statements submitted as audited accounts of the subsidiaries for FY25, told SEBI she had only certified provisional financial statements and had not conducted their statutory audit. The regulator concluded that audit reports carrying her signature and stamp were prima facie forged.
In another case, limited review reports attributed to CA Nikhil Gupta carried UDIN (Unique Document Identification Number) numbers that were generated only after SEBI sought information, even though the reports were purportedly signed earlier. UDINs are designed to be tamper-proof with timestamped generation—they cannot be backdated. The fact that UDINs were generated after SEBI's inquiry indicated either backdated documents or fabricated certifications.
These audit irregularities pointed to systemic failures in internal controls. Weak segregation of duties allowed single individuals excessive control over financial reporting. Insufficient oversight during the financial close process meant material journal entries and consolidations weren't adequately reviewed. Document verification controls failed to catch forged audit reports before submission to regulatory authorities. The audit committee apparently didn't verify the credentials and engagement of subsidiary auditors or challenge unusual revenue growth from newly-acquired subsidiaries.
Kore Digital completed a preferential issue in March 2024 to raise capital. SEBI found that a substantial portion of these proceeds was diverted to two entities: Kashvee Infra Projects Pvt Ltd and SD Square Manpower Pvt Ltd. Both were found prima facie to be fake or non-genuine. Ravindra Doshi, Kore Digital's Managing Director, was an authorized signatory to Kashvee's bank account and served as its director and shareholder from incorporation until July 31, 2024.
The diversion had severe implications for capital allocation efficiency. Instead of deploying capital for legitimate business growth, funds were routed through fake entities. The preferential issue proceeds may have been used to create and subsidize the shell entities, fund circular transactions, and support the fabricated revenue that helped Kore Digital meet mainboard migration criteria. This represented a complete breakdown in capital budgeting, treasury controls, and fund utilization monitoring.
SEBI's interim order has created a leadership vacuum at Kore Digital. The regulator restrained Managing Director Ravindra Doshi, CEO Chaitanya Doshi, and CFO Kashmira Doshi from buying, selling, or dealing in company shares until further orders. With the three most senior executives restrained, strategic decision-making is paralyzed, operational continuity is at risk, and the company's ability to respond to the crisis is severely hampered.
The bar on accessing the securities market to raise public funds creates immediate liquidity constraints. Kore Digital cannot raise working capital through public offerings or rights issues, and alternative funding sources like bank debt or private equity become difficult to access under the regulatory cloud. Growth financing is effectively frozen—the company cannot fund capital expenditures, working capital, or strategic initiatives.
NSE has been directed not to allow Kore Digital to migrate from the NSE Emerge SME platform to the mainboard until SEBI clearance. This blocks the company from accessing the valuation premium, broader investor base, and enhanced credibility that mainboard listing typically provides. Companies that successfully migrate to mainboard typically experience median market cap appreciation of around 40% in the 12 months post-migration—opportunity now lost to Kore Digital.
SEBI has ordered a forensic audit of Kore Digital's books from the listing date in June 2023 through March 31, 2026. This creates prolonged operational and financial disruptions. Management must devote substantial time to audit-related activities, business operations face resource diversion, and decision-making on strategic initiatives is delayed. Financial statement uncertainty complicates current reporting and makes future guidance impossible.
The cumulative impact represents an existential threat to Kore Digital as a going concern. Recovery depends on the outcome of SEBI's investigation and the company's ability to address the identified issues comprehensively. For investors, the case serves as a stark reminder that extraordinary growth stories backed by opaque acquisitions and weak governance deserve the highest level of scrutiny. The Rs 541.3 crore revenue misstatement wasn't just an accounting error—it was allegedly a carefully constructed mirage designed to obscure the absence of genuine business operations.
