The Securities and Exchange Board of India (SEBI) on Wednesday levied aggregate monetary penalties of ₹1.35 crore on Oriental Trimex, its promoters, and other associated parties for alleged large-scale misstatement and manipulation of the company's financial statements. According to SEBI's adjudication order, this action is the outcome of a multi-year investigation spanning FY17 through FY 20. The regulatory hammer descends amidst a valuation paradox where the company's stock closed at ₹7.12 on the NSE on February 18, 2026, marking a marginal increase of 0.71% despite the severe regulatory indictment.
The investigation revealed that a major portion of reported sales and purchases was inflated through transactions with 22 entities that were non-existent, not traceable at their registered addresses, or not engaged in the company's core marble business. These 22 entities represented a significant share of the company's disclosed turnover, contributing between approximately 80 per cent and 90 per cent of total revenue and purchases in certain financial years. SEBI found that many of these counterparties had their GST registrations cancelled or suspended, indicating a clear lack of commercial substance in the reported transactions. This concentration raised serious doubts about the reliability and authenticity of *Oriental Trimex'*s financial statements, as reported by SEBI.
The entities involved in the fraud include Rajesh Kumar Punia, MD; Savita Punia, Whole-time Director; Om Prakash Sharma, Mirage Marble Private Ltd, Nirmal Marble Ltd; Abhishek Jain, Vivek Seth and Jitendra Surendra Gupta. SEBI found that Oriental Trimex artificially boosted its reported revenue and raw material expenses by entering into transactions with these entities that were either non-existent, struck off from statutory records, untraceable at their registered addresses, or not involved in the marble trade—the company's primary line of business. The modus operandi involved engaging with entities that were either struck off from statutory records, not operating from their registered addresses, or dealing in unrelated goods like garments and cement.
Despite the regulatory action, Oriental Trimex faces significant operational and financial challenges that may explain the counter-intuitive market reaction. The company has demonstrated poor revenue growth of only 4.29% over the past three years, coupled with negative cash flow from operations amounting to ₹72.68 crore and high debtor days exceeding 500. Its EBITDA margin has been notably low, averaging -44.12% over the last five years. The company recently defaulted on a One-Time Settlement (OTS) arrangement with Asset Reconstruction Company India Limited (ARCIL) on November 30, 2025, for an amount of ₹3.24 crore. While its market capitalization hovers around ₹52-53 crore, its Price-to-Earnings ratio appears undervalued at 5.2x to 8.2x compared to the industry average of 27.8x, though analysts have rated it as 'below average quality' with recent 'Sell' ratings from MarketsMOJO.
