Market regulator Sebi today barred 8 entities from securities market for 10 years in the case of manipulations related to Global Depository Receipt issuance by Cals Refineries Ltd, while two have been asked to return 'unlawful gains' of USD 92 million (about Rs 580 crore).
These entities include six individuals -- Devanathan Sundararajan, Sarvesh Goorha, Ravi Chilikuri, Sanjay Rai Malhotra, Gagan Rastogi and Deep Rastogi -- and two firms, Honor Finance and Asia Texx Enterprises.
Sebi, in its order, has "prohibited them from accessing the capital market directly or indirectly, and dealing in securities or instruments with Indian securities as underlying, in any manner whatsoever, for 10 years."
Besides, Sebi has directed "Gagan Rastogi and Asiatexx Enterprises jointly and severally to disgorge the unlawful gain of USD 92 million along with the simple interest at the rate of six per cent per annum."
Further, they will have to pay the amount within 45 days.
"... Sundararajan, Goorha, Sanjay Rai Malhotra and Chilikuri have aided Cals in the fraudulent arrangement with Honor with regard to the subscription of the GDR issue and thereafter, mislead investors by making false announcements regarding 'successful' subscription of GDRs," Sebi Whole Time Member S Raman said in his 53-page order.
"Sundararajan had concealed the 'related party transaction' (which resulted in enriching the promoter at the cost of the other investors) and submitted false information to Sebi. Asia Texx and Gagan Rastogi have also benefitted from the fraudulent arrangement for purchase of refinery equipment," he added.
GDR is a financial instrument used to raise capital overseas.
Further, four other directors -- Bhupendra Kansagra, Manabendra Guha Roy, M S Ramachandran and Mohan Lal Garg -- of Cals were warned to ensure that all their future dealings in the securities market be done strictly in accordance with law.
In October last year, Sebi had prohibited Cals from issuing equity shares and any other security for further eight years, as the company was found guilty in a case involving irregularities in issuance of GDRs.
An interim prohibitory order was imposed on the company in 2011 and the company has already undergone restrictions for two years, while a final order was passed in October 2013 imposing a ten-year ban on the company from issuance of any securities.
Besides, the regulator also investigated the role of other entities connected to Cals in this case.
