sebi:WTM/AB/IVD/ID4/9275/2020-21
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Facts / Headnote
Noticees found in violation of SEBI Act, 1992 and PFUTP Regulations, 2003; penalties imposed including restraint orders on Noticees 2 and 3 from accessing the securities market for 3 years
Provisions invoked
- s. 11
- s. 24
- s. 11(4)
- s. 19
- s. 11B
- s. 12A
- s. 11(2)
- s. 11D
- s. 58A
- s. 14
- s. 7(1)
- s. 65
- s. 376
- s. 31
- s. 33
- s. 14(4)
- s. 24(1)
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(c)
Parties
- Birla Cotsyn (India) Limited (Noticee No. 1)
- Mr. P.V.R. Murthy (Noticee No. 2)
- Mr. Yashovardhan Birla (Noticee No. 3)
- Mr. Y.P. Trivedi (Noticee No. 4)
- Mr. Mohandas Adige (Noticee No. 5)
Holding
The Noticees were found to have violated the SEBI Act, 1992 and PFUTP Regulations, 2003 by facilitating a fraudulent GDR issue in which BCIL pledged GDR proceeds to secure a loan taken by the sole subscriber Vintage FZE from EURAM Bank, and by making misleading announcements to the stock exchange. The company and its directors were held liable for the arrangement approved through the Board resolution dated December 21, 2009.
Full text
Final Order in the matter of Birla Cotsyn (India) Limited Page 2 of 55 11(4) of the SEBI Act, 1992 should not be issued against them. The SCN issued to the Noticees, also contained the copies of documents relied upon in the SCN, which are as detailed below:
Final Order in the matter of Birla Cotsyn (India) Limited Page 3 of 55 The GDRs of BCIL were subscribed by only one entity Vintage FZE (hereinafter referred to as “Vintage”), by obtaining a loan through credit agreement from the European American Investment Bank (hereinafter referred to as “EURAM Bank”), a bank based in Austria and further the Noticee No. 1 (BCIL) had provided security for the loan obtained by Vintage from EURAM Bank by pledging the GDR proceeds, through account charge agreement with the EURAM Bank.
Final Order in the matter of Birla Cotsyn (India) Limited Page 4 of 55 2) Pledge of the account no. 580015 held with the Bank as set out in a separate pledge agreement which is attached hereto as Annex 2 and which forms an integral part of this Loan Agreement.”
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Source: SecMarx — sebi:WTM/AB/IVD/ID4/9275/2020-21. 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.