Summary of this article
Sebi uncovers Rs 1,000 crore round-tripping fraud at Dhenu Buildcon.
Promoters Surendra and Virendra Jain barred from securities markets.
Regulator halts corporate actions and freezes fraudulent equity transfers.
The Securities and Exchange Board of India (Sebi) has issued an interim order against Dhenu Buildcon Infra over an alleged fund rotation and fraudulent share allotment scheme.
The market regulator has also named several conspirators and connected entities in this regard. In its interim order dated August 19, 2026, Sebi ordered Dhenu Buildcon to halt all corporate actions, including alterations to its capital structure, bonus issues, stock splits, rights issues, name changes, and dividend distributions until further directions.
Sebi has identified Surendra Kumar Jain and Virendra Jain as the key conspirators of the fraudulent scheme and have barred them from accessing the securities market, including buying, selling, or dealing in securities directly or indirectly.
Additionally, six other entities which were found to have received preferential equity shares have also been barred from selling or transferring their holdings in Dhenu Buildcon.
Some of the other entities named in the interim order include, Golkonda Aluminium Extrusions, Shanta Agencies, Shri Niwas Leasing and Finance, Tiaan Consumer, Twinkle Mercantiles & Credits, Utsav Securities, Edoptica Retail India, Genesis Developers and Holdings, Hillridge Investments, Abhijit Trading Company, Intellectual Builders, Victory Software, Blue Bell Finance, and PB Properties.
The associated conspirators and individuals include Tilokchand Kothari, Deepak Bhojak, Pankaj Saxena, Suresh Rai, Parmanand Chaubey, Dharmendra Gupta, Sanjay Bhatnagar, Divyesh Kishor Bhanushali, Prabhakar Kumar, and Aarohi Verma.
Notably, while preferential allottees had commenced selling shares with initial gains exceeding Rs 1.34 lakh, Sebi refrained from ordering disgorgement or penalties at this interim stage, instead ordering an immediate freeze to stop the shares from entering the broader market.
Sebi said, “The interim restraint is being imposed solely to preserve the subject matter of the proceedings and prevent the regulatory process from being rendered ineffective by any transfer, disposal or encumbrance of the securities before the matter is fully investigated.”
What Sebi Said in its Interim Order
The Sebi investigation in the matter ran from August 1, 2024 to July 31, 2026, following a reference from the Serious Fraud Investigation Office concerning unsecured loans aggregating to Rs 1,000 crore received by Dhenu Buildcon and their subsequent conversion into equity.
Sebi found that the transactions formed an arrangement to fabricate borrowing liabilities, manipulate books of accounts, and transfer entire company ownership to connected shell entities. The regulator also outlined the core intent behind these fraudulent activities.
“Considering the facts of the matter, the examination alleges that the prima facie round tripping financial transactions carried out by noticees constitutes manipulation of the books of accounts and financial statements of DBIL that would directly or indirectly manipulate the price of securities of DBIL,” Sebi said.
Dhenu Buildcon’s Modus Operandi and Circular Fund Routing
In the stock market, round tripping of funds is an illegal mechanism where a pool of money is circulated through multiple intermediate entities before returning to the original sender, creating the appearance of new capital inflows and commercial liquidity without any genuine underlying economic activity.
From December 24-31, 2024, a base capital of Rs 25.05 crore was cycled through 46 transactions across 28 distinct routing paths. The rapid circulation created the illusion of Rs 1,000 crore in unsecured loans arriving from seven purported lenders.
Concurrently, Dhenu Buildcon transferred Rs 996.10 crore onward to five network entities. Despite recording Rs 1,000 crore in incoming loans within eight days, the bank balance of Dhenu Buildcon never exceeded Rs 26 crore. In December 2025, Dhenu Buildcon converted Rs 840 crore out of these artificial loans into 5.91 billion equity shares, transferring 99.70 per cent of equity capital to six lending entities without real consideration.
“The scheme was orchestrated by these individuals through a complex network of entities employing layered financial transactions and cross-shareholdings, with the objective of generating unlawful gains at the cost of public investors,” Sebi said.
Sebi Key Findings and Legal Violations
Physical site inspections conducted by Sebi revealed that Dhenu Buildcon and its associated lending entities lacked a genuine business. The registered offices of the company were either closed, being used for residential purposes, or occupied by unrelated businesses, or completely devoid of operational personnel.
Additionally, none of the fund recipient entities held valid goods and services tax (GST) registrations, and Dhenu Buildcon exhibited negligible annual revenues despite a market valuation surging into thousands of crores.
“The examination of DBIL’s financial statements further revealed that the company had virtually negligible revenues and profits during the examination period,” Sebi said.
Sebi concluded that the noticees prima facie violated Section 12A of the Sebi Act, 1992, along with Regulations 3 and 4 of the Sebi Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 (PFUTP), for using deceptive devices, publishing misleading financial declarations, and orchestrating fraud.
