sebi:WTM/GM/IVD/ID4/13571/2021-22
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Facts / Headnote
Proceedings initiated against Noticee No.1 (Vikash Metal and Power Ltd.) vide Show-cause Notice dated February 01, 2018 and Supplementary Show-cause Notice dated June 18, 2018 are disposed of without any directions in view of the Company Petition before the High Court of Calcutta; findings record fraudulent GDR scheme by Company in connivance with Vintage and liability of directors.
Provisions invoked
- s. 12A
- s. 12
- s. 28A
- s. 376
- s. 63
- s. 135
Regulations
- Reg. 4
- Reg. 3
- Reg. 4(2)
- Reg. 3(a)
Holding
Vikash Metal and Power Ltd. in connivance with Vintage FZE devised a fraudulent GDR scheme whereby Vintage received GDRs without paying consideration, with directors Akkash Patni, Vimal Kumar Patni and Vikash Patni held liable, but proceedings against the Company were disposed of without directions in view of the pending Company Petition before the High Court of Calcutta.
Full text
Order in the Matter of GDR Issue of Vikash Metal and Power Limited Page 1 of 95 WTM/GM/IVD/ID4/13571/2021-22 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA
Order in the Matter of GDR Issue of Vikash Metal and Power Limited Page 2 of 95 12. European American Investment Bank AG (FII Registration No.) INASFD211608
Order in the Matter of GDR Issue of Vikash Metal and Power Limited Page 3 of 95 2. Summary of Show-cause Notice - (i) The Scheme (ii) The Modus Operandi and Fund Flow 2.1. Pursuant to the findings of the Investigation Report, a common Show-cause Notice dated February 01, 2018 was issued to the Noticees (hereafter referred to as the “SCN”). By way of the SCN, all the Noticees were called upon to show cause as to why suitable directions should not be issued against them under Sections 11, 11B and 11(4) of the SEBI Act. 2.2. In this regard, the SCN relying on the Investigation Report has alleged that— A. The scheme of issuance of GDRs was fraudulent as Noticee No. 1, the Company, had entered into a Pledge Agreement with the bank, European American Investment Bank AG (“EURAM Bank”) for a loan that had been availed by Vintage FZE (“Vintage”), also known as Alta Vista International FZE, towards the subscription of GDRs issued by the Company. The Pledge Agreement was not disclosed to the stock exchanges, which made the investors believe that the said GDR issue was genuinely subscribed by foreign investors. Noticee No. 6, Vintage was a party to this fraudulent scheme. Noticee No. 2, Akkash Patni, who was a Director in Vikash, signed a Pledge Agreement with EURAM Bank, whereby the account holding the GDR proceeds was given as security for the loan availed by Vintage from EURAM Bank for subscribing to the GDRs of Vikash. Noticee No. 3, Vimal Kumar Patni and Noticee No. 4, Vikash Patni
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Source: SecMarx — sebi:WTM/GM/IVD/ID4/13571/2021-22. 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.