SEBI investigations revealed that shares issued under promoter's quota and subject to a lock-in of five years were pledged with a company which was not a bank or financial institution. SEBI said the act of pledging locked-in shares by the promoter was in violation of SEBI guidelines for disclosure and investor protection which do not permit the same for a period of five years from the date of commencement of production or date of allotment whichever is earlier.

After considering the submissions made by the company during personal hearing and documents on record, SEBI has barred the company and its directors, Avinash Magan, Atul Magan and K K Dawan from accessing the capital market.