Sebi Passes Final Order Against Trafiksol ITS Technologies, Debars Company and Promoters For One Year

The Securities and Exchange Board of India (Sebi) passed its final order against Trafiksol ITS Technologies and its promoter-directors, Jitendra Narayan Das and Poonam Das, on August 29, 2026.

Under the final order passed by Sebi, Jitendra Narayan Das, managing director, Trafiksol ITS Technologies; Poonam Das, whole-time director; and Amarjeet Singh, whole-time member; have been barred from accessing the securities market, including buying, selling, or dealing in securities, directly or indirectly, for a period of one year.

In addition to the market ban, Sebi has also imposed monetary penalties totalling to Rs 1.05 crore across the entities. Trafiksol was fined Rs 30 lakh, comprising Rs 5 lakh under Section 15A(a), Rs 20 lakh under Section 15HA, and Rs 5 lakh under Section 15HB of the Sebi Act.

Jitendra Narayan Das was penalised Rs 50 lakh, which included Rs 40 lakh for fraudulent and unfair trade practices. Poonam Das was penalised Rs 25 lakh, including Rs 20 lakh under Section 15HA, and Rs 5 lakh under Section 15HB.

Timeline of the Trafiksol IPO Case

Trafiksol filed its Draft Red Herring Prospectus (DRHP) in May 2024 to raise Rs 44.87 crore on the BSE SME platform. The public issue opened for subscription between September 10 and September 12, 2024, and was oversubscribed 345.65 times. Following the strong demand for the company’s shares, the share allotment status for the initial public offering (IPO) was finalised on September 13, 2024, with the listing scheduled for September 17, 2024.

However, before the stock could list, BSE and Sebi received complaints about discrepancies in the company’s proposed Rs 17.70 crore rupee software procurement from a shell vendor mentioned in the DRHP. After the complaints were received, BSE halted the listing.

After the listing was halted, Sebi issued an interim order on October 11, 2024, freezing the proceeds in escrow and initiating a probe. Later, on December 3, 2024, Sebi directed Trafiksol to refund all subscription funds to allottees with interest and cancel the shares.

Trafiksol tried to appeal Sebi’s decision before the Securities Appellate Tribunal (SAT), but the tribunal dismissed the appeal in January 2025. Following an investigation into the remaining financial and disclosure aspects, Sebi issued a detailed show cause notice in August 2025 before concluding the proceedings with its final order on August 29, 2026.

What Sebi Found in Its Probe

Sebi found that the company had indulged in fraudulent practices and deliberate misstatements to make the company’s financial profile look better ahead of the public issue. Sebi mentioned in the order that Trafiksol inflated its FY 2023-24 financial footprint by recording Rs 4.50 crore in unbilled revenue on the last day of the fiscal year without any verifiable performance.

Noting the lack of documentation to support this eleventh-hour accounting entry, the regulator dismissed the company’s claims.

“In view of the substantial year-end journal entries, absence of material evidencing the underlying performance and its quantification, absence of subsequent invoices/Goods and Services Tax (GST) evidence, along with the statutory auditor’s observation, I am unable to accept the genuineness of the unbilled revenue,” Sebi said.

The company also engaged in circular trading patterns with two related entities, Limco Global Services and Ishira Global Services, routing identical goods with fixed mark-ups and leaving over Rs 11 crore in unpaid receivables. Together, these artificial transactions accounted for more than 20 per cent of the company’s reported operational revenue.

Highlighting how this arrangement was structured to artificially boost the company’s financials without real economic substance, the market regulator observed a clear motive.

“By positioning itself between Limco and Ishira, TITL was able to record the full purchase value and thereafter the full onward sale value in its books, thereby creating a substantially larger footprint in terms of sales, purchases and corresponding trade receivables relative to the economic activity on record,” Sebi said.

Sebi further found that Trafiksol netted purchases against sales in its prospectus, obscuring customer and supplier concentration risks from prospective investors. The investigation also found that the company concealed a Rs 67 lakh payment made to the father of the merchant banker’s director on the very same day it paid merchant banking fees.

Emphasising that prospective shareholders have a right to know about such financial entanglements, the regulator found this omission unacceptable.

“A prospective investor examining the DRHP was entitled to be informed of a subsisting financial relationship of this nature so as to independently assess its relevance to the relationship between the issuer and its sole merchant banker, including any potential conflict of interest arising therefrom,” Sebi said.

These fabricated accounts, coupled with the procurement of a bogus software quote from a shell entity, misled investors into subscribing heavily to the issue, Sebi said.

Rejecting the company’s defense that these were mere presentation errors, the regulator concluded that the actions were deliberately deceptive. “The misstatements and omissions found in the present matter cannot be treated as inconsequential errors of presentation. Their cumulative effect was to present a financial and commercial profile materially different from that borne out by the underlying transactions and records,” Sebi said.

Sebi’s probe into the matter highlights the importance of conducting independent due diligence and closely scrutinising company disclosures before investing in IPOs, especially at a time when the primary market is seeing a strong surge in fundraising through the equity route.