Disclosure under Regulation 30 of SEBI (LODR) Regulations is attached herewith.
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SEBI issued an Administrative Warning Letter to V.B. Desai Financial Services Ltd on March 24, 2026, after concluding an inspection of the company's merchant banking activities conducted in January 2025, covering the period April 2022 to November 2024. SEBI found three compliance failures: (1) delay in intimating changes in Key Managerial Personnel through the SI Portal, (2) failure to maintain a Structured Digital Database (SDD) under insider trading rules from April 2022 to February 2023, and (3) inadequate infrastructure for merchant banking activities and lack of an arm's length relationship between its merchant banking and other businesses. The company had submitted its reply to SEBI's findings in May 2025, but SEBI still flagged the lapses. SEBI has warned the company to tighten compliance and place the letter before its Board, with the threat of further action if violations recur. The company has stated there will be no impact on its financial or operational activities.
This is a warning rather than a monetary penalty, so there is no immediate financial hit. However, it highlights serious compliance gaps in the company's merchant banking operations, and any repeat violation could trigger stricter SEBI action, posing a reputational and regulatory risk for shareholders to watch.