SEBI passed final order dated October 23, 2013, in the matter of market manipulation using GDR issues against Cals Refineries Ltd (hereinafter referred to as Cals). Cals was directed not to issue equity shares or any other instrument convertible into equity shares or any other security, for a period of ten years.
SEBI also investigated the role of other entities connected to Cals in the manipulations related to the GDR issuance by Cals. The investigation conducted by SEBI in this regard revealed the following:
1. Funds of Cals were siphoned off to the accounts of its promoters under the pretext of payment for refinery parts.
2. Certain directors and promoters of Cals enabled Cals to provide financial assistance in the form of guarantee to create illusion of successful GDR subscriptions. All these activities were done without the knowledge of other shareholders of Cals.
3. The persons in charge of the affairs of Cals who were aware of the fraudulent activities related to GDR issuance of Cals concealed material information regarding its GDR issue to mislead investors of Cals and SEBI.
In view of the fraudulent activities of entities connected to Cals, Shri S. Raman, Whole Time Member, vide Order dated December 31, 2014, prohibited following entities from accessing the capital market directly or indirectly, and dealing in securities or instruments with Indian securities as underlying, in any manner whatsoever, for a period of ten years:
Shri S. Raman, Whole Time Member, also directed Shri Gagan Rastogi and Asiatexx Enterprises Limited jointly and severally to disgorge the unlawful gain of US $92 million along with the simple interest at the rate of 6% per annum. Further, four other directors of Cals were warned to ensure that all their future dealings in the securities market be done strictly in accordance with law
This Order comes into force with immediate effect.
The full text of the order is available on the website: www.sebi.gov.in