Sebi closes case against two Taneja Aerospace officials

Sebi today disposed of proceedings against two officials of Taneja Aerospace and Aviation Ltd (TAAL) in a case pertaining to alleged fraudulent activities violating securities market regulations.
The watchdog had issued a show-cause notice to Salil Taneja and C S Kameswaran in 2013 for allegedly diverting funds from the company to another entity, TAAL Technologies Private Limited (TTPL). Both these firms had common promoters and directors.
Taneja and Kameswaran were the chairman and the managing director of TAAL, respectively, and were the only shareholders of TTPL during the relevant period.
Noting that the allegations of the fraudulent act have been levelled against the noticees "on the basis of prima facie possibilities", Sebi today said the suspected intention of the noticees has not been found to be suggesting that they have diverted or misappropriated the funds infused by TAAL into TTPL.

Taneja and Kameswaran are the noticees.
"In fact, the show-cause notice even does not allege any such diversion or misappropriation. It has also been found that the noticees have not deployed those funds for their personal benefits or to avoid their personal losses.

"It is admitted position that the shares have been allotted to TAAL against the advance given by it to TTPL, which has subsequently merged with TAAL in terms of the scheme of amalgamation sanctioned by the High Court of Madras," the order by Sebi Whole-Time Member Rajeev Kumar Agarwal said.
According to him, there is no material on record to suggest that the value of TAAL has been eroded on account of any fraudulent activity rather than on account of a business decision of the board of directors.

An amount of Rs 9.70 crore was infused by TAAL into TTPL as advance against share applications. Furthermore, TAAL purchased all shares of TTPL held by Taneja and Kameswaran as a result of which TTPL became a 100 per cent subsidiary of TAAL, and later both were merged.
In the show-cause notice, among others, it was alleged that certain disclosures regarding these transactions were not made to the stock exchanges where TAAL is listed.