sebi:Order/GR/BM/2022-23/16742-16747
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Provisions invoked
- s. 15
- s. 12A
- s. 15H
- s. 27
- s. 15J
- s. 28A
- s. 23E
- s. 376
- s. 24(1)
Regulations
- Reg. 3
- Reg. 2(1)(c)
- Reg. 200
- Reg. 2(1)(b)
- Reg. 2(c)
- Reg. 3(a)
- Reg. 2(i)(c)
Parties
- S. Giridharan (Noticee No. 1)
- G. Gita (Noticee No. 2)
- T.S. Ravichandran (Noticee No. 3)
- S. Arvind (Noticee No. 4)
- Arun Panchariya (Noticee No. 5)
- Noticee No. 6 (Managing Director of Vintage FZE)
Holding
The order holds that the GDR issue of Edserv Softsystems Limited was not genuine but was effected through a fraudulent arrangement, as the subscription money was received from a single entity (Vintage FZE) which had borrowed the funds from EURAM Bank with the GDR proceeds pledged as security. The order rejects the Noticees' contentions regarding delay in issuing the SCN and SEBI's jurisdiction over GDR issues.
Full text
Adjudication Order in the matter of GDR Issue of Edserv Softsystems Limited Page 2 of 54 BACKGROUND IN BRIEF 1. The Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted investigation into the alleged irregularities in the Global Depository Receipts (herein after referred to as “GDRs”) issued by Edserv Softsystmes Ltd., (hereinafter referred to as “Company”/ “Edserv”) during the period from July 01, 2011 to August 31, 2011 (hereinafter referred to as “Investigation Period”).
Adjudication Order in the matter of GDR Issue of Edserv Softsystems Limited Page 3 of 54 4. However, subsequently G Gita (Noticee No. 2), T.S. Ravichandran (Noticee No.3) and S. Arvind (Noticee No. 4), Directors on the Board of Edserv in the board meeting dated July 25, 2011 passed another board resolution and additionally authorised Mr. S. Giridharan (Noticee No. 1), Chairman & CEO of the Company to sign, execute any application, agreement etc. as may be required.
Adjudication Order in the matter of GDR Issue of Edserv Softsystems Limited Page 4 of 54 7. It was also observed that on default on loan payment of USD 23.29 million by Vintage, the amount was adjusted by EURAM Bank from the GDR proceeds of Edserv as it had pledged GDR proceeds against the said loan.
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Source: SecMarx — sebi:Order/GR/BM/2022-23/16742-16747. 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.