GDR manipulation: Sebi imposes Rs 1.65 cr fine on Visu International, 3 individuals for GDR manipulation

NEW DELHI: Sebi on Thursday slapped a complete superb of Rs 1.65 crore on and three people for fraudulent buying and selling actions with respect to world depository receipts issued by the corporate again in 2006.

A superb of Rs 1.25 crore has been imposed on Visu Worldwide, Rs 15 lakh every on B Prabhakar Reddy and Mukesh Charuadiya, and Rs 10 lakh on Okay Viswanath Reddy.

An investigation was performed by Sebi with respect to GDR (World Depository Receipt) issuance by the corporate throughout April-Might 2006. Visu, at present generally known as Ed&Tech Worldwide Ltd, had issued GDRs amounting to USD 9.66 million. All the GDRs had been subscribed by one entity Seazun, as per a Sebi order.

It was noticed that

Efisa had granted mortgage to Seazun by means of a Credit score Settlement for subscribing to the GDRs.

Sebi famous that the corporate had pledged all the GDR proceeds to Banco as a safety towards the mortgage availed by Seazun from Banco Financial institution for subscribing to GDRs of Visu by getting into into an Account Cost Settlement with Banco Financial institution.

The watchdog discovered that Seazun signed a credit score settlement with Banco for cost of subscription of GDRs and Chauradiya had signed an account cost settlement with Banco on the behalf of Visu for receiving the subscription cash.

The fraudulent association of credit score settlement and account cost settlement resulted in subscription of GDR difficulty of the corporate and the association was not disclosed by Visu to the inventory exchanges, the regulator mentioned.

The people, who’ve been fined, had been the administrators of Visu in the course of the related time of signing of account cost settlement.

Additionally, they’d participated within the firm’s board assembly during which a decision was handed for opening an account with Banco whereby the GDR proceeds could be deposited. A decision was additionally handed authorising Banco to make use of the GDR proceeds of Visu as safety towards mortgage, as per the order.

It’s established that Visu had intentionally and actively hid the true and materials info and made a number of false and deceptive disclosures. It additionally made misrepresentation of info to the inventory alternate and buyers in its shares and such acts on the a part of the listed firm can’t be seen leniently, Sebi’s Adjudicating Officer Prasanta Mahapatra mentioned whereas passing the order.

The regulator additionally famous that the GDR difficulty wouldn’t have been subscribed, if Visu had not given such a safety towards the mortgage taken by Seazun.

In February final yr, the regulator had restrained Visu Worldwide and sure people from accessing the securities marketplace for a interval starting from 1 to five years.

Based on a separate order handed on Thursday, the watchdog imposed a complete superb of Rs four lakh on R Wadiwala Securities Pvt Ltd for its failure to segregate securities and monies of shoppers’, amongst different violations.

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