sebi:Order/BD/AA/2020-21/9438

SEBI · SEBI · 2019-06-24 · B J Dilip, Adjudicating Officer

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Facts / Headnote

Noticee held liable for violations of Section 12A(a), (b), (c) of the SEBI Act read with Regulations 3(a), (b), (c), (d) and 4(1) of the PFUTP Regulations, 2003; penalty to be imposed under Section 15HA

Provisions invoked

• s. 15
• s. 19
• s. 12A
• s. 12
• s. 15H
• s. 15J
• s. 15F
• s. 28A
• s. 376
• s. 135

Regulations

• Reg. 4
• Reg. 3
• Reg. 4(1)
• Reg. 2(c)
• Reg. 3(a)

Parties

• Noticee (name not specified in excerpt)

Holding

The Noticee was found to have violated Section 12A(a), (b), (c) of the SEBI Act read with Regulations 3(a), (b), (c), (d) and 4(1) of the PFUTP Regulations, 2003, by participating in a fraudulent GDR issuance scheme of Teledata in connivance with Arun Panchariya and connected entities. The violations attract monetary penalty under Section 15HA of the SEBI Act.

Full text

Page 2 of 30 APPOINTMENT OF ADJUDICATING OFFICER 2. The undersigned was appointed as Adjudicating Officer, vide communique dated June 24, 2019 under Section 19 read with Sub-section (1) & (2) of Section 15-I of the SEBI Act and Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’) to inquire into and adjudge the alleged violations committed by the Noticee under Section 15HA of SEBI Act. SHOW CAUSE NOTICE, REPLY AND HEARING

Page 3 of 30 AG (‘EURAM Bank’) entered into an Escrow Agreement dated February 26, 2010. It was noted that Vintage FZE (‘Vintage’) had entered into a Loan agreement dated February 26, 2010 with EURAM Bank relating to a dollar term loan facility of USD 36.96 million for the purpose of subscribing to the GDR issue of Teledata. The Loan Agreement was signed by Mr. Arun Panchariya (‘AP’) in the capacity of Managing Director of Vintage. Further, Vintage opened a loan account (a/c no. 540012-027-1J) with EURAM Bank and Teledata opened a retail account (a/c no. 580016J) with EURAM Bank. (c) The following was inter-alia mentioned in the Loan agreement:

Page 4 of 30 (d) On perusal of copy of the Know Your Customer documents of Vintage for opening an account with EURAM Bank, it was observed that AP was the beneficial owner and Managing Director of Vintage as on June 06, 2007. It was further observed that Alkarni Holding Ltd was the shareholder of Vintage and AP was the sole shareholder of Alkarni Holding Ltd. (e) From the examination of the above Loan agreement, it was observed that Vintage had availed of loan facility to the extent of USD 36.96 million from EURAM Bank to subscribe to the GDRs of Teledata. (f) As per the documents provided by EURAM Bank, the Board of Directors of Teledata passed a resolution dated January 30, 2010. The relevant extracts of the said resolution are as under: “OPENING OF CURRENT ACCOUNT- EURAM BANK AUSTRIA FOR GDR ISSUE The Chairman informed the Board of Director that the Company wants to open a "Current Account" for domestic division with Euram Bank Austria for the purpose of GDR issue. After discussions, it was decided to open an account and following resolution was passed. RESOLVED THAT a bank account of the Company be opened with EURAM Bank Austria for GDR issue in the name of "Teledata Technology Solutions Ltd - GDR" and that the said Bank be and is hereby authorized to honour all cheques, Draft, Bils of Exchanges, Promissory notes and other negotiable instruments signed, drawn, accepted or made on behalf of the Company severally by Mr. K. Padmanabhan, Authorized Signatory of the Company an

Source: SecMarx — sebi:Order/BD/AA/2020-21/9438. 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.