PENTAMEDIA GRAPHICS LTD. AND ITS DIRECTORS DEBARRED
Securities and Exchange Board of India (SEBI) vide order dated October 3, 2005 has confirmed the following directions already issued through an ad interim order dated May 27, 2005, in the matter of Pentamedia Graphics Ltd. (formerly Pentafour Software and Exports Ltd.):
<!--[if !supportLists]-->1. <!--[endif]-->Pentamedia Graphics Ltd. (PMGL) and its directors – PMGL is directed not to issue any further shares or alter its share capital in any manner till further directions. The company and its directors, namely Mr. V Chandrasekaran, Dr. S Ramani, Mr. T V Krishnamurty, Ms. Usha Ganesarajah and Mr. S D Viswanathan are prohibited from accessing capital market or dealing in securities, in any manner, directly or indirectly, till further orders in this regard by SEBI.
<!--[if !supportLists]-->2. <!--[endif]-->Vijay Advertising P Ltd. (VAPL) (Preferential Allottee) – The sale proceeds accruing to VAPL from the above dubious deal is directed to be impounded and VAPL is further directed to retain the impounded sale proceeds in its account and the same should not be utilized in any manner for any purpose. VAPL and its directors namely Mr. M Vardharajan and Mrs. Bhuvaneswari should not deal in securities market in any manner directly or indirectly till further directions by SEBI in this regard.
Oriental Bank of Commerce, Mylapore branch and Cameo Corporate Services Ltd., Chennai, the Share Transfer Agents for PMGL were directed to preserve the original records available with them.
All the above directions shall take effect immediately and shall be in force until further orders.
SEBI received complaints from Oriental Bank of Commerce (OBC), Mylapore Branch (erstwhile Mylapore Branch of the Global Trust Bank Ltd.) against Cameo Corporate Services Ltd. (Cameo), Chennai, the Share Transfer Agents for PMGL alleging that, despite repeated follow-up by OBC over a period of four months, Cameo did not respond to the request of OBC for transfer of shares held in the name of VAPL to the name of OBC.
The information so far collected by SEBI has revealed that PMGL had availed various credit facilities from GTB and had huge outstanding liabilities. PMGL had entered into a Memorandum of Understanding with GTB for restructuring of the dues and the subject share certificates which were in physical form and held in the name of VAPL, a preferential allottee and which shares were subject to lock-in provisions, were pledged to OBC as security for the restructuring fee payable by PMGL to OBC. When the shares continued to be under pledge to OBC, PMGL issued another set of original share certificates bearing the same distinctive numbers to VAPL. The above facts have been admitted by PMGL. VAPL in turn raised a loan by pledging these shares to one Gem Class P Ltd. presumably to bail out PMGL. SEBI did not find any merit in the contention of PMGL that as per its arrangement with GTB, the shares pledged to OBC were not to be transferred in the name of the bank. Thus, it was clear that PMGL had committed a major offence by issuing fake shares. Hence, SEBI, in the interests of the investors and safety and integrity of the securities market, had issued the above directions through an ex-parte ad interim order dated May 27, 2005. Subsequently, after giving an opportunity to make oral and written submissions to the concerned entities, SEBI has confirmed the directions contained in the ad interim order, as above.
The full text of the order is available on the website: www.sebi.gov.in
October 04, 2005