Capital markets regulator Sebi has imposed a penalty totalling Rs 10.9 crore on seven entities, together with Teledata Technology Solutions Ltd, in a case pertaining to irregularities within the issuance of Global Depository Receipts (GDRs) of the corporate.
Individually, Sebi levied a effective of Rs 10.1 crore on Teledata, Rs 20 lakh every on Okay Padmanabhan and Arun Panchariya and Rs 10 lakh every on N Sakthivel, M S Ramakrishnan, R Ravichandran and G Jagadish.
In its order handed on Tuesday, Sebi mentioned that Panchariya connived with the opposite six entities to construction the fraudulent situation of GDRs whereby Teledata suffered a loss to the tune of USD 32.53 million.
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The Securities and Exchange Board of India (Sebi) carried out an investigation into the alleged irregularities within the issuance of GDRs by Teledata through the interval from February 2010 to March 2010. The focus of investigation was to determine whether or not shares underlying GDRs have been issued with correct consideration and whether or not applicable disclosures have been made by Teledata with respect to its GDRs.
In its probe, Sebi discovered that the scheme was designed to create an impression of receiving funds by GDR subscription. The whole situation dimension was round 35,37,505 GDRs, by which capital amounting to USD 36.96 million was raised.
This fallacious impression was aided by Teledata when it gave deceptive disclosures concerning the subscribers to the difficulty and suppressed info relating to the pledge situations of the GDR proceeds pledged with Euram Bank.
The GDR subscription was structured in a fashion whereby Panchariya managed subscriber, Vintage, acquired the GDRs with out spending a penny by pledge of the GDRs and GDR proceeds towards the mortgage used for subscription.
“Thus, no funds actually flowed to the company i.e. Teledata until Vintage repaid the loans. While Vintage repaid part of the loan, and funds to that extent did flow to Teledata, Vintage defaulted in its loan obligation to the extent of USD 32.35 million. Hence, Teledata did not get equivalent funds against the equity it had issued, leading to a loss to shareholders of Teledata, whose valuations were diluted by the expanded equity capital,” Sebi famous.
Sebi mentioned these entities have been concerned in fraudulent and unfair commerce follow regarding securities market, thereby contravening the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
Source: www.financialexpress.com”