Cracking the whip, Sebi on Wednesday barred 19 domestic and foreign entities from securities markets for manipulation in issuances of global depository receipts and warned several others including FIIs.
The regulator has imposed a ten-year ban on K Sera Sera and Asahi Infrastructure and Projects, which figured among the six companies whose GDR issuances were manipulated, while at least 26 entities including European American Investment Bank AG (Euram) have been warned that all their future dealings in Indian markets should be strictly as per regulations.
Sebi has been probing misuse of GDRs (Global Depository Receipts) for routing black money back to India for which role of more than 50 individuals and companies was under scanner.
The modus-operandi typically involves creating an intricate web of entities in offshore locations for multi- layered transfers of funds before bringing them back to India.
GDR is a popular financial instrument used by listed companies in India, as also in many other countries, to raise funds denominated mostly in US dollar or euros.
Typically, GDRs are bank certificates issued in more than one country for shares of a company, which are held by a foreign branch of an international bank. While shares trade on a domestic stock exchange, which happens to be in India in the present case, they can be offered for sale globally through the empanelled bank branches.
In the cases under scanner, it was noticed that the companies had shown raising funds without actually involving real investors, hinting at possible routing of black money.
In six separate rulings, Sebi also banned two entities — India Focus Cardinal Fund (Sub-Account) and KII Ltd — for six years each while three other individuals — N V Simhadri, H Harshawardhan S Rathore and Nikunj Babulal Choradiya — will have to undergo debarment of one year each.
Source: Press Trust of India