Sebi Hurls Rs 15 Lakh Fine on Individual for the GDR Issue Influence
Sebi on September 22 forced a fine of Rs 15 lakh on a person for fake exercises as for issuance of Global Depository Receipts (GDRs) by Beckons Industries Ltd in 2010. Chandra Prakash (noticee) has been punished by the guard dog.
The organization had come out with its GDR issue in June 2010 for a measure of $10.54 million. Concerning the subtle issue, Vintage had consented to a credit arrangement with EURAM Bank for installment of $10.54 million. Simultaneously, Beckons opened its record with the bank with the end goal of credit of continuation of the GDR issue.
Beckons likewise went into a promise concurrence with the bank while the GDR membership cash was acquired distinctly from Vintage. In a 25-page order, Sebi said that at the hour of consenting to the vow arrangement, the organization was unmistakably mindful that Vintage had procured a credit just to buy the GDR issue.
Nonetheless, it was discovered that the GDRs were converted into equity shares and were sold in the Indian capital market. Undoing of GDRs began from September 17, 2010 and proceeded till March 7, 2011 and all the GDRs were changed over, according to the request. As per the controller, the noticee was related to Beckons as a non-executive free director and was available during the executive gathering in February.
Apparently, as known, at the meeting, a consentient resolution was witnessed to have been passed for the sake of an open account with EURAM Bank for receiving subscription money in order of the GDRs, proposed to be issued by the company itself likewise. In accordance to the regulator, the noticee was seen to be linked with Beckons as a non-executive independent director and was witnessed during the board meeting in February.
"It is particularly evident from the established facts that the entire proceedings of GDR which was transferred in the EURAM's account of Beckons served as collateral to the loan taken by Vintage in subscribing GDR and such amount was ultimately transferred to the Beckons' Indian bank account, only as and when Vintage repaid the loan to EURAM," the order stated.
On the report of the regulator, the procedure in which the entire scheme of fraudulence and deception was planned and executed completely just demonstrates beyond reasonable doubt the manipulative intent to deliberately withhold climacteric information from investors.