sebi:WTM/AB/IVD/ID4/14459/2021-22
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Facts / Headnote
Fraudulent GDR scheme found; Noticees held liable for violations of Section 12A(a) of SEBI Act read with PFUTP Regulations; penalties imposed under Section 15HA; disgorgement of Rs. 1.11 Crore ordered jointly and severally against Noticees 2, 3 and 4; proceedings against Noticees 5 and 8 disposed of.
Provisions invoked
- s. 11B
- s. 11
- s. 11(4)
- s. 19
- s. 11(1)
- s. 12A
- s. 12
- s. 21
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 28A
- s. 23
- s. 23E
- s. 23H
- s. 65
- s. 11(5)
- s. 35
- s. 376
Regulations
- Reg. 4
- Reg. 3
- Reg. 3(a)
- Reg. 3(b)
- Reg. 8(1)
Holding
The GDR issue of Winsome Textile Industries Ltd. constituted a fraudulent scheme in which Noticee No. 2 (Arun Panchariya) connived with Winsome to structure an issue wherein Winsome did not receive commensurate consideration to the tune of USD 9.018 million, violating Section 12A(a) of the SEBI Act read with Regulations 3(b) and 4(1) of the PFUTP Regulations. Penalties under Section 15HA were imposed on multiple Noticees and disgorgement of Rs. 1.11 Crore was ordered jointly and severally against Noticees 2, 3 and 4.
Full text
Final Order in the matter of GDR Issue by Winsome Textile Industries Ltd. Page 1 of 91 WTM/AB/IVD/ID4/14459/2021-22 SECURITIES AND EXCHANGE BOARD OF INDIA FINAL ORDER
Final Order in the matter of GDR Issue by Winsome Textile Industries Ltd. Page 2 of 91 The aforesaid entities are hereinafter individually referred to by their respective names/notice numbers and collectively as “the Noticees”.
Final Order in the matter of GDR Issue by Winsome Textile Industries Ltd. Page 3 of 91 3.2. Pan Asia Advisors Limited, (hereinafter referred to as “Pan Asia”/ “Noticee No.11”) a UK based entity was the Lead Manager of GDR issue of Winsome and Arun Panchariya (hereinafter referred to as “AP”/ “Noticee no. 2”) was the MD of Noticee no. 11. Local custodian for GDR issue of Winsome was DBS Bank, Mumbai and Bank of New York Mellon (hereinafter referred to as “BONY”) was the global depository bank. GDRs were listed on Luxembourg Stock Exchange. 3.3. On September 16, 2010, the directors of Winsome, namely Mr. Satish Bagrodia (Noticee no. 5), Mr. Ashish Bagrodia (Noticee no. 6), Mr. Manish Bagrodia (Noticee no. 7), Mr. Chandra Mohan (Noticee no. 8), Mr. Satish Girotra (Noticee no. 9) vide a Circular Resolution dated September 16, 2010 authorized the EURAM Bank to use the Winsome’s GDR proceeds deposited with European American Investment Bank AG (hereinafter referred to as “EURAM Bank”) as security in connection with loan and also authorized Noticee no. 6 to sign, execute any application, agreement etc. as may be required by the EURAM Bank. 3.4. The issue of GDR of Winsome was subscribed by only one subscriber i.e. Vintage FZE (hereinafter referred to as “Vintage / “Noticee no. 3”). Mukesh Chauradia (Noticee no. 10) was MD and director (subsequently MD also), of Noticee no. 3 and AP was its 100% beneficiary. For subscribing to the GDR issue of Winsome, Noticee no. 3 took a loan of USD
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Source: SecMarx — sebi:WTM/AB/IVD/ID4/14459/2021-22. 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.