sebi:ORDER/PM/RR/2019-20/6630-6635

SEBI · SEBI · 2017-06-23 · Prasanta Mahapatra, Adjudicating Officer

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Provisions invoked

Regulations

Parties

Holding

The Adjudicating Officer found that G V Films Ltd. and its Chairman and directors committed fraudulent and unfair trade practices by concealing an arrangement to pledge GDR proceeds as security for a loan taken by Whiteview to subscribe to the company's GDR issue, thereby misleading investors about the successful subscription.

Full text

Adjudication Order in the matter of G V Films Ltd. Page 2 | 31 Market) Regulations, 2003 (hereinafter referred to as “SEBI PFUTP Regulations, 2003”) and provisions of Listing Agreement.

Adjudication Order in the matter of G V Films Ltd. Page 3 | 31 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 3. A common Show Cause Notice dated December 21, 2017 (hereinafter referred to as ‘SCN’) was issued to the Noticees under the provisions of Rule 4 (1) of the Adjudication Rules and Rule 4 of SCR Adjudication Rules, to show cause as to why an inquiry should not be held against the Noticees and why penalty should not be imposed on Noticee 1 under the provisions of Sections 15HA of the SEBI Act and Section 23E of SCRA, 1956 and on Noticee 2 to Noticee 6 under the provisions of Section 15 HA of SEBI Act, for the aforesaid alleged violations. The aforesaid SCN was served upon the Noticees separately at their latest address available on record.

Adjudication Order in the matter of G V Films Ltd. Page 4 | 31  For the project ‘GV Studio city’ which will be an integral complex of theme multiplex theatres themed hotels and Shopping malls in India in different locations  To acquire / buy controlling interest in other companies having similar line of business/activities and  To meet the expenditure of the GDR issue c) With regard to the aforesaid GDR issue, BSE had given approval for listing and trading of 16,00,00,000 equity shares of Rs. 10 each underlying GDRs on May 23, 2007. d) SEBI, pursuant to IOSCO MMoU, requested Comissãso do Mercado de Valores Mobiliãrios, Portugal (hereinafter referred to as CMVM) to obtain information from Banco Portugues De Negocios, Portugal and Banco, Portugal, where GDR proceeds were deposited/ pledge agreement was signed, with regard to GDR issues by the companies. e) From the information submitted by Banco through CMVM, it was observed that  Whiteview signed a Credit Agreement dated March 15, 2007 with Banco for payment of GDR subscription amount of US $40 million.  GV signed Account Charge Agreement dated March 27, 2007 with Banco (pledged GDR proceeds as collateral against the loan availed by Whiteview).  The Bank account of GV maintained with Banco was operative prior to the said GDR and there were transactions pertaining to FCCB & GDR issue done by GV in the year 2006. f) From the Credit Agreement and Account Charge Agreement, the following was observed: i. Whiteview had entered

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Source: SecMarx — sebi:ORDER/PM/RR/2019-20/6630-6635. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.