sebi:Order/GR/KG/2020-21/11163

SEBI · SEBI · 2011-02-03 · G. Ramar, Adjudicating Officer

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Facts / Headnote

Noticee held liable for contravention of Section 12A(a),(b),(c) of SEBI Act, 1992 read with Regulations 3(a),(b),(c),(d) and 4(1) of PFUTP Regulations, 2003; monetary penalty imposed under Section 15HA

Provisions invoked

• s. 15
• s. 12A
• s. 15H
• s. 15J
• s. 28A
• s. 23I
• s. 376

Regulations

• Reg. 3
• Reg. 200
• Reg. 3(a)

Parties

• Shri Mukesh Chauradiya

Holding

The Noticee, Shri Mukesh Chauradiya, was held to have aided and abetted the fraudulent scheme of Aqua Logistics Limited (AQUA) in self-financing its own GDR issue, in contravention of Section 12A(a),(b),(c) of the SEBI Act, 1992 read with Regulations 3(a),(b),(c),(d) and 4(1) of the PFUTP Regulations, 2003, warranting imposition of monetary penalty under Section 15HA.

Full text

Adjudication Order in respect of Shri Mukesh Chauradiya in the matter of Aqua Logistics Limited Page 2 of 40 (amounting to USD 62.379 Million, approximately Rs. 284.32 Crore at RBI exchange rate of Rs. 45.58 per USD) on February 10, 2011, equivalent to 9,45,76,000 equity shares of Re. 1 each, and the said issue was subscribed by one entity viz. Vintage FZE (now known as Alta Vista International FZE) (hereinafter referred to as “Vintage”). It was observed that the subscription amount was paid by Vintage by obtaining a loan from European American Investment Bank AG (EURAM Bank) by entering into Loan Agreement dated February 3, 2011 with EURAM Bank. It was observed that directors of AQUA in its board meeting held on September 9, 2010, had passed board resolution inter alia authorizing the opening of an account with EURAM Bank for the purpose of receiving subscription money in respect of the GDR issue of AQUA and also for using the funds deposited in the said bank account as security in connection with loans, if any. AQUA had signed a pledge agreement dated February 3, 2011 with EURAM Bank pledging GDR proceeds as collateral against the loan availed by Vintage, executed by Mr. M.S. Sayad, Whole Time Director (hereinafter referred to as “WTD”) of AQUA. Vide the said loan agreement, AQUA had pledged the GDR proceeds against the loan availed by Vintage FZE for subscribing to GDRs of AQUA, thus securing Vintage FZE’s loan.

Adjudication Order in respect of Shri Mukesh Chauradiya in the matter of Aqua Logistics Limited Page 3 of 40 its Managing Director and on a perusal of copy of Know Your Customer documents (signed on June 06, 2007) of Vintage available with EURAM Bank, it was observed that Arun Panchariya was the beneficial owner of Vintage. It was therefore inter alia alleged that the Noticee had aided and abetted the fraudulent scheme of AQUA in self-financing its own GDR issue.

Adjudication Order in respect of Shri Mukesh Chauradiya in the matter of Aqua Logistics Limited Page 4 of 40 Satya Ranjan Prasad was appointed as the Adjudicating Officer in the matter in the place of Shri Biju. S. Thereafter, the undersigned was appointed as the Adjudicating Officer in the instant case, which was communicated vide communique dated May 22, 2019. These proceedings are therefore being carried forward where they had been left off by the previous AO, and opportunities of personal hearing was granted as detailed hereinafter.

Source: SecMarx — sebi:Order/GR/KG/2020-21/11163. 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.