EKI plans appeal after expense finding set at Rs 26.34 crore

EKI Energy Services Limited said it plans an appeal to the Securities Appellate Tribunal (SAT) against the Securities and Exchange Board of India (SEBI) order dated October 30, 2026, after its final expense finding was set at Rs 26.34 crore versus Rs 48 crore alleged in the show-cause notice.

Why is EKI appealing the SEBI order?

EKI is preparing an SAT appeal against SEBI’s October 30, 2026 order because it does not concur with certain assertions and actions taken by the regulator. In its November 3, 2026 press release, EKI said the order recorded no quantifiable gain from the alleged defaults, no quantifiable loss to investors and no repeat default.

The company said it is evaluating legal remedies under Section 15T of the SEBI Act, 1992, which provides for an appeal before SAT. EKI said its representatives inspected the documents relied upon in the proceedings, filed detailed written replies and appeared at personal hearings.

EKI said its SAT case will include documents concerning the Rs 26.34 crore expense finding and the accounting treatment of revenue in the first three quarters of FY 2022-23. The company described an appeal as part of the legal process and said it holds SEBI and its processes in high regard.

What changed in EKI’s final expense finding?

EKI said the final SEBI order limited the expense finding to Rs 26.34 crore, compared with Rs 48 crore alleged in the show-cause notice. The difference between the notice and final finding is Rs 21.66 crore, and EKI said the final order accepted the balance as genuine.

For the Rs 26.34 crore amount, EKI said the order found that it had not established that documents submitted to the Ministry of Corporate Affairs (MCA), the Income Tax Department and independent experts were the same as the documents placed before SEBI. EKI said it will present that evidence before SAT.

The company identified consistency of the documentary record as a central issue in its proposed appeal, rather than disputing that SEBI conducted the review. EKI did not disclose an SAT filing date or hearing date in its November 3, 2026 announcement, but said it intends to pursue the matter under Section 15T.

How did EKI address the revenue-recognition issue?

EKI said the order also concerns the point at which revenue from certain carbon credit project contracts should have been recognised under Indian Accounting Standard 115, or Ind AS 115, during the first three quarters of FY 2022-23. The company characterised this as a difference in professional judgment between management and its then statutory auditor in a novel business line.

According to EKI, management adopted what it called the more conservative view and revised the relevant figures before the FY 2022-23 annual accounts were finalised. EKI said its audited FY 2022-23 financial statements contain the revised numbers and that it had disclosed the revisions to stock exchanges at the time.

EKI said the order treated the revision as a mitigating factor and noted that management had applied its mind to the accounting issue. The company also said the underlying contract amounts were received and that income tax and Goods and Services Tax were paid on time.

Are EKI’s operations and promoter holdings affected?

EKI said the October 30, 2026 order places no restriction on its business operations. Its carbon project development, carbon credit transactions, clean cooking programmes and climate advisory work for clients in India and overseas continue without interruption, according to the company.

The company also said no promoter or promoter-group entity sold shares during the period under review, while promoter holding remained about 73.4% to 73.5%. EKI said the order made no finding that funds reached its managing director, promoters or their relatives.

EKI nevertheless said it will challenge the order’s direction for its managing director to recover the amount. The November 3 statement separates that intended challenge from the company’s position that the October 30 order did not restrict its carbon-credit, clean-cooking or advisory activities.

What did the MCA decide on EKI’s inspection report?

EKI said the MCA considered the inspection report under Section 206(5) of the Companies Act, 2013. According to EKI, an MCA letter dated April 2, 2026 decided that no penal action would be taken under Sections 447 and 448, provisions dealing with fraud.

The company cited the April 2, 2026 MCA decision as part of the wider record surrounding the SEBI proceedings. The announcement does not state that the MCA decision determines the outcome of EKI’s planned SAT appeal against the October 30, 2026 SEBI order.

Conclusion

EKI’s stated position is that the final Rs 26.34 crore expense finding was lower than the Rs 48 crore allegation in the show-cause notice, while the order recorded no quantifiable investor loss, no quantifiable gain from the alleged defaults and no repeat default. The company also points to its FY 2022-23 revenue revision and the MCA’s April 2, 2026 decision not to take action under Sections 447 and 448.

The next disclosed development is EKI’s planned SAT appeal under Section 15T of the SEBI Act, 1992. The company says it will place evidence before SAT concerning the documents behind the Rs 26.34 crore finding and will also raise the direction requiring its managing director to recover the amount.