sebi:Order/KS/PP/2021-22/11986
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Facts / Headnote
Order continuing adjudication proceedings; charges of violation of Section 12A(a)-(c) of SEBI Act read with PFUTP Regulations upheld against Noticee (penalty quantum not stated in excerpt)
Provisions invoked
- s. 11B
- s. 15A
- s. 15
- s. 19
- s. 12A
- s. 12
- s. 15H
- s. 27
- s. 15J
- s. 11C(3)
- s. 28A
- s. 27(1)
- s. 260
- s. 376
- s. 29
- s. 2(60)
Regulations
- Reg. 3
- Reg. 4(2)
- Reg. 4(2)(f)
- Reg. 3(c)
- Reg. 3(b)
- Reg. 22
- Reg. 3(d)
- Reg. 4(2)(r)
- Reg. 4(2)(k)
- Reg. 20
- Reg. 21
- Reg. 4(2)(c)
- Reg. 25
Parties
- Noticee (individual director of K Sera Sera Productions Ltd / KSS)
Holding
The Noticee, a director of KSS who signed the Pledge Agreement dated October 30, 2007 with Euram Bank securing the loan to Vintage FZE for GDR subscription, was held responsible for the fraudulent GDR issues and liable for violating Section 12A(a)-(c) of the SEBI Act read with Regulations 3(b), 3(c), 3(d), 4(2)(c), 4(2)(f), 4(2)(k) and 4(2)(r) of the PFUTP Regulations, 2003.
Full text
Page 2 of 45 devised and structured by AP in connivance with KSS to the detriment of the Indian investors wherein loans were arranged for the subscription of GDRs of KSS on both these occasions. It is further alleged that AP was Managing Director, 100% shareholder and Authorized Signatory of Vintage. Thereafter, using certain Foreign Institutional Investors (FIIs), AP got the GDRs converted into underlying shares and sold them in the Indian securities market with the help of certain domestic entities connected to him.
Page 3 of 45 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING: 4. A Show Cause Notice ref. A&E/EAD-8/KS/VB/8174/2019 dated March 28, 2019 (hereinafter referred to as ‘SCN’) was issued to the Noticee under the provisions of Rule 4(1) of Adjudication Rules to show cause as to why an inquiry should not be held against him and why penalty, if any, should not be imposed on him under Section 15HA of the SEBI Act for alleged violation of the relevant provisions of law.
Page 4 of 45 Imagination 5,25,000 35,17,500 11.73 Echelon 5,50,000 36,85,000 12.29 Flamboyant 4,85,000 32,49,500 10.84 Loan & Pledge Agreement signed among K Sera, Vintage &Euram. d. It is alleged that the Loan and Pledge Agreement for its first GDR issue and second GDR Issue were signed among K Sera, Vintage and Euram. The same is discussed below in detail:-
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Source: SecMarx — sebi:Order/KS/PP/2021-22/11986. 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.