sebi:WTM/SKM/EFD1-DRAI/14/2018-19
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Facts / Headnote
Violations established against all Noticees; monetary penalty imposed - Noticee 1 (amount not specified in excerpt), Noticees 2, 4, 5, 6: two years restraint each; Noticees 3, 7: five years restraint each; existing holdings frozen during restraint period
Provisions invoked
- s. 19
- s. 12A
- s. 376
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
Parties
- M/s. Tulsi Extrusions Limited (Noticee no. 1)
- Mr. Omprakash S. Jhavar (Noticee no. 2)
- Mr. Sanjay Taparia (Noticee no. 3)
- Mr. Gopaldas Maheshwari (Noticee no. 4)
- Mr. Rajesh B Jhunjhunwala (Noticee no. 5)
- Mr. Jaiprakash B. Kabra (Noticee no. 6)
- Mr. Pradip J Mundhra (Noticee no. 7)
Holding
Tulsi Extrusions Limited and its directors (Noticees 2-7) were held liable for violating Section 12A(a),(b),(c) of the SEBI Act and Regulations 3(a),(b),(c),(d), 4(1), 4(2)(f),(k),(r) of PFUTP Regulations by concealing the Pledge and Loan Agreement arrangement with Vintage FZE and EURAM Bank, thereby misleading investors about the success of the GDR issue. Non-executive/independent directors were also held liable for passing the May 7, 2010 Board resolution without due diligence.
Full text
Order in the matter of M/s. Tulsi Extrusions Limited Page 2 of 35 BACKGROUND 1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) conducted an investigation into the issue of Global Depository Receipts (hereinafter referred to as “GDR”) by M/s. Tulsi Extrusions Limited (hereinafter referred to as “Tulsi/Company/Noticee no. 1”). The relevant period of investigation was from August 01, 2010 to September 30, 2010.
Order in the matter of M/s. Tulsi Extrusions Limited Page 3 of 35 Tulsi i.e., USD 14.325 million, and, it was observed that the entire 1.25 million GDR were subscribed by only one entity, i.e. Vintage.
Order in the matter of M/s. Tulsi Extrusions Limited Page 4 of 35 Tulsi. The bank account in which GDR proceeds were to be deposited, was in the name of the Tulsi but on account of the Pledge Agreement, the GDR proceeds deposited in the said account were not at the disposal of the Company to utilize for its own needs till such time Vintage repaid the loan to EURAM Bank.
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Source: SecMarx — sebi:WTM/SKM/EFD1-DRAI/14/2018-19. 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.