sebi:Order/VV/PR/AK/2022-23/16649-16651
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Provisions invoked
- s. 15
- s. 11B
- s. 12A
- s. 21
- s. 15H
- s. 27
- s. 15I
- s. 15J
- s. 28A
- s. 23J
- s. 23E
- s. 23
- s. 23A
- s. 376
- s. 149(12)
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
Parties
- Commex Technology Limited (Noticee No. 1)
- Mr. Ketan Sheth / Late Shri Ketan Sheth (Noticee No. 2)
- Noticee No. 3 (independent director)
Holding
The order analyzes whether Commex Technology Limited and its directors violated Section 12A of the SEBI Act and PFUTP Regulations, 2003 in connection with its GDR issue, finding that the company pre-pledged GDR proceeds as security for a loan to a third-party subscriber (Vintage) without disclosing this arrangement to investors. The excerpt provided does not include the final disposition or penalty determination.
Full text
Adjudication Order in the matter of Commex Technology Limited Page 2 of 46 in respect of its GDR issue Table No. 1 a. Vide letter dated May 26, 2015, Commex was inter-alia advised to provide list of the subscribers to its GDR issue. Commex, vide letter dated June 22, 2015, provided list of subscribers to its GDRs to SEBI and details are as under: Table No. 2
Adjudication Order in the matter of Commex Technology Limited Page 3 of 46 in respect of its GDR issue c. European American Investment Bank AG (hereinafter referred to as “EURAM Bank”) granted loan to Vintage (Represented by Mr. Arun R. Panchariya in the capacity of the Managing Director) by way of a Loan Agreement (Number: K050509 - 003) dated May 5, 2009 (hereinafter referred to as the “Loan Agreement”) for payment of USD 9.99 million towards subscription of the GDRs of Commex, which is equivalent to the gross value of GDRs issued by Commex i.e., USD 9.99 million.
Adjudication Order in the matter of Commex Technology Limited Page 4 of 46 in respect of its GDR issue f. As detailed above, it was observed that the Loan Agreement and Pledge Agreement, enabled Vintage to avail loan from EURAM Bank for subscribing to GDRs of Commex. The GDR issue would not have been subscribed, had Commex not given such security towards the loan taken by Vintage. The bank account in which GDR proceeds were held, was in the name of the Commex but the amount deposited in the account was not at the disposal of the Company as the same was pre-pledged as a security even prior to issuance of GDR against the loan availed by Vintage.
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Source: SecMarx — sebi:Order/VV/PR/AK/2022-23/16649-16651. 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.