Business Standard

Sebi bans Beckons Industries, its senior officials for GDR manipulation

Through two separate orders, Sebi noted that the firm issued 1.44 million GDRs amounting to USD 5 million in July 2008 and 2.49 million GDRs worth USD 10.54 million in June 2010


Press Trust of India New Delhi
Markets regulator Sebi on Tuesday restrained Beckons Industries Ltd and its senior officials from accessing securities market in a matter related to manipulation in issuance of global depository receipts (GDR) issuance.
Through two separate orders, Sebi noted that the firm issued 1.44 million GDRs amounting to USD 5 million in July 2008 and 2.49 million GDRs worth USD 10.54 million in June 2010.
On both the occasions, all GDRs were subscribed by only one entity, Vintage FZE, on obtaining a loan from EURAM Bank.
The company acted as a guarantor and deposited the entire GDR proceeds received from Vintage FZE with EURAM Bank as security against the loan for subscribing to the GDRs issued by the company.
The company also failed to make requisite disclosures pertaining to the GDR issue.
"The entire scheme created by the company (Beckons) starting with passing of board resolution...have cumulatively resulted in misleading the investors at large," Sebi said in similarly worded orders.
Regarding officials of the firm, Sebi said they didn't show any diligence on their part as directors in the entire GDR issue, or even otherwise, in the functioning of the company.
Gurmeet Singh, I S Sukhija, Chandra Prakash and H S Anand are the officials of the company who have been fined.
While the firm has been banned for five years, the officials have been restrained from accessing the markets for one to two years for their respective roles in GDR issuance manipulation on both the occasions.
In a separate order, Sebi vacated directions issued against three individuals -- Basanta Kumar Dey, Sudha Kumari and Mritunjay Kumar Verma -- through its interim order in February 2019 in a matter pertaining to issuance of redeemable preference shares (RPS) by JKS Projects Ltd.
The firm had made an offer of RPS in the financial years 2011-2012 and 2012-2013 and raised over Rs 1.61 crore from 404 allottees.
The issuance of RPS was prima facie found in violation of norms and thus Sebi passed certain directions against the company, its directors and promoters including the individuals, in February 2019.
Considering the submissions of the individuals, Sebi noted that they were shown as non-executive directors in the records of Registrar of Companies, which has been strongly denied by them.
Sebi noted that the individuals have also initiated action against the company for alleged misuse of their know your customer (KYC) documents to appoint them as directors without their knowledge.
The material on records also do not indicate about their involvement in the affairs of the company and therefore should not be held liable for mobilization of funds by the company and the refund as they had never acted as directors, Sebi said.
The regulator disposed of the proceedings against the individuals and vacated the directions that restrained them from accessing securities market.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Oct 27 2020 | 10:13 PM IST

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