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Sebi slaps Rs 10 cr fine on Sybly Industries for GDR manipulation

Press Trust of India  |  New Delhi 

Markets regulator slapped a fine of over Rs 10 crore on in a matter related to manipulation in issuance of global depository receipts (GDR).

The penalty follows a probe by the regulator regarding the firm's allotment of 1.51 million GDR amounting to USD 6.99 million on the in June 2008.

During the probe, Sebi observed that the entire 1.51 million GDR were subscribed by only one entity, (now known as Alta FZE).

The subscription amount for GDR was paid by Vintage after obtaining loan from European American Investment Bank (EURAM).

However, the loan paid by Vintage was secured by pledge agreement between Sybly and EURAM Bank, the regulator said.

Sebi further said that the GDR issue would not have been subscribed if the Sybly had not given such security towards the loan taken by Vintage.

"Such fraudulent arrangement was not disclosed to the stock exchange in a true and complete manner but was reported as misleading and would have influenced decision of investors," the regulator noted.

The fraudulent arrangement violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations and by not informing to the exchanges the delisting of GDR in April 2013, which was price sensitive information, the firm violated Listing Agreements, Sebi said.

Besides, the firm did not disclose the pledge agreement in the financial statements for the corresponding year and thereby contravened Listing Agreements.

Accordingly, the (Sebi) imposed a fine of Rs 10.30 crore on the firm.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, March 15 2019. 22:55 IST