sebi:Order/SRP/AE/2018-19/1597
Facts / Headnote
Adjudication Proceedings abated without going into the merits of the case; no penalty imposed.
Provisions invoked
- s. 15
- s. 12
- s. 15H
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3(a)
- SEBI (PFUTP) Regulations, 2003 — 3(b)
- SEBI (PFUTP) Regulations, 2003 — 3(c)
- SEBI (PFUTP) Regulations, 2003 — 3(d)
- SEBI (PFUTP) Regulations, 2003 — 4(1)
Parties
- Late Shri Vimal Prakash Mittal
Holding
The Adjudication Proceedings initiated against the deceased Noticee, Late Shri Vimal Prakash Mittal, are abated without going into the merits of the case, and no penalty is imposed.
Full text
Page 2 of 4 the loan obtained by Vintage FZE, through Pledge Agreement dated May 30, 2008 signed between Sybly and EURAM Bank, wherein Sybly pledged GDR proceeds against the loan availed by Vintage FZE for subscribing to GDRs of Sybly. Investigations observed that the aforesaid Pledge Agreement was an integral part of Loan Agreement entered into between Vintage FZE and EURAM Bank, and these agreements enabled Vintage FZE to avail the loan from EURAM Bank for subscribing GDRs of Sybly. It was alleged that the GDR issue would not have been subscribed had Sybly not given such security towards the loan taken by Vintage. Investigations observed that the Company had reported to BSE that the GDR issue of the Company has been successfully subscribed which made investors believe that the said GDR issue was genuinely subscribed. Investigations also observed that the aforesaid arrangement (viz. Loan Agreement and Pledge Agreement) was not disclosed to the public, and the Company allegedly reported misleading news to the stock exchange which contained information in a distorted manner and may have influenced decision of investors. Therefore, it was alleged that the scheme of issuance of GDRs was fraudulent. Investigations revealed that the directors of Sybly in its board meeting held on March 31, 2008 had authorized EURAM Bank to use Sybly’s GDR proceeds deposited with EURAM Bank as security in connection with loan, and authorized Shri Mahesh Chand Mittal (Managing Director of Sybly) and
Page 3 of 4 Section 15HA of the SEBI Act, 1992 the aforesaid violations alleged to have been committed by the Noticee. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING
Page 4 of 4 case. Consequently, no penalty is imposed on the Noticee, who has since deceased and the Adjudication Proceedings shall stand abated.
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