SEBI has imposed a penalty of over Rs 72 crore on Winsome Textile Industries Ltd.
New Delhi:
Markets regulator Securities and Exchange Board of India (SEBI) on Wednesday imposed a fine of over Rs 72 crore on Winsome Textile Industries Ltd, its directors and two other persons in a case related to issuance of Global Depository Receipts (GDRs) by the firm.
Among the directors facing the fine are Ashish Bagrodia, Manish Bagrodia and Satish Girotra.
Winsome issued 1.29 million GDRs amounting to $9.99 million on March 31, 2011 and Pan Asia Advisors Limited was the principal manager of the issue. Arun Pancharia was the Managing Director of Pan Asia Advisors.
The investigation revealed that the vintage FZE GDR was the sole customer of the issue. Mukesh Chordia was the managing director of the vintage and Panchariya was its 100% beneficiary.
Vintage took a loan from EURAM Bank to subscribe to the issue. For the loan, Winsome had pledged the GDR proceeds as collateral.
In addition, FII-sub-accounts linked to Panchariya converted GDRs and Aspire Emerging Fund sold converted equity shares worth Rs 1.11 crore in the Indian securities market.
Further, the firm made misleading corporate declarations and also failed to inform the stock exchanges about the delisting of GDRs from the Luxembourg Stock Exchange.
“Winsome convinced investors in the securities market in India that the whole idea for GDR was obtained by it which was not true and thus, induced investors in India to deal in securities, and in India cheated the investors,” SEBI said.
The directors also acted as a party to the fraudulent scheme of issuing GDRs.
The markets regulator has banned Winsome, its three directors, Vintage FZE, Arun Panchariya, Mukesh Chordia, Pan Asia Advisors and seven funds from the securities market for different time periods.
Further, Aspire Emerging Fund was directed to pay up to the payment of interest amounting to 12 per cent from the date of sale of equity shares along with illegal gains of more than Rs 1.11 crore made by way of sale of equity shares Is.
For violation of market rules, SEBI has imposed a fine of Rs 4.4 crore on the firm, Rs 67 crore on Mr. Panchariya, Rs 59 lakh on three directors and Rs 67 lakh on Mukesh Chordia.
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