sebi:PM/NR/2020-21/10914-10917
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Facts / Headnote
Allegations of violations of Section 12A(a),(b),(c) of SEBI Act read with Regulations 3(a),(b),(c),(d), 4(1), 4(2)(f),(k),(r) of SEBI (PFUTP) Regulations, 2003 and Section 21 of SCRA read with Clause 36(7) of Listing Agreement held established against Noticees 1 to 4
Provisions invoked
- s. 15
- s. 19
- s. 12A
- s. 12
- s. 21
- s. 15H
- s. 15I
- s. 15J
- s. 23I
- s. 23J
- s. 23
- s. 23E
- s. 77(2)
Regulations
- Reg. 4
- Reg. 3
- Reg. 3(a)
Parties
- Visu International Ltd. (Noticee 1)
- Noticee 2 (Independent Director)
- Noticee 3
- Noticee 4 (B Prabhakar Reddy)
Holding
The Noticees were found to have violated Section 12A(a),(b),(c) of the SEBI Act and Regulations 3(a)-(d) and 4(1) (and for Noticee 1, also 4(2)(f),(k),(r)) of the PFUTP Regulations by contriving a fraudulent GDR issuance scheme involving a back-to-back loan arrangement with Banco Bank and Seazun, and by concealing material information from the stock exchanges and investors.
Full text
Adjudication Order in the matter of Visu International Ltd., Page 2 of 40 (hereinafter referred to as “Banco Bank”) had granted loan to Seazun Ltd (hereinafter referred to as “Seazun”) by way of a Credit Agreement dated April 12, 2006 (hereinafter referred to as the “Credit Agreement”) for enabling them to subscribe to the GDR issued by Visu and it was observed that the entire 2.175 million GDR were subscribed by only one entity, i.e. Seazun.
Adjudication Order in the matter of Visu International Ltd., Page 3 of 40 disposal of the Company to utilize for its own needs till such time Seazun repaid the loan to Banco Bank. It was further observed that the GDRs issued by the Company to Seazun were subsequently converted into equity shares and sold in the Indian Securities Market.
Adjudication Order in the matter of Visu International Ltd., Page 4 of 40 to sign the documents, based on which the Noticee 4 signed account charge agreement. Therefore, it is alleged that the Noticee 2, 3 and 4 have acted as colluding parties to the above stated scheme contrived to issue GDRs in a fraudulent manner. Accordingly, it is alleged that the Noticees 2, 3 and 4 have violated the provisions of Section 12A (a), (b), (c) of SEBI Act,1992 read with Regulations 3(a), 3(b), 3(c), 3(d) and 4(1) of SEBI (PFUTP) Regulations.
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Source: SecMarx — sebi:PM/NR/2020-21/10914-10917. 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.