https://www.taxtmi.com/caselaws?id=445174 The Securities Appellate Tribunal Mumbai held that a GDR issue constituted a fraudulent scheme violating Section 12A of the SEBI Act and PFUTP Regulations. The company misled investors by not disclosing that the GDR was subscribed by only one entity and that proceeds were pledged to a bank, making funds unavailable for company use. The Tribunal found the corporate announcement misleading as it created false impressions about multiple subscribers. However, regarding the independent director appellant who resigned before the violations, the Tribunal allowed the appeal, holding that independent directors cannot be penalized for violations when not involved in day-to-day affairs and without evidence that GDR matters were placed before the audit committee. en-us Wed, 06 Sep 2023 00:00:00 +0530 Wed, 01 Nov 2023 13:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=445174 The Securities Appellate Tribunal Mumbai held that a GDR issue constituted a fraudulent scheme violating Section 12A of the SEBI Act and PFUTP Regulations. The company misled investors by not disclosing that the GDR was subscribed by only one entity and that proceeds were pledged to a bank, making funds unavailable for company use. The Tribunal found the corporate announcement misleading as it created false impressions about multiple subscribers. However, regarding the independent director appellant who resigned before the violations, the Tribunal allowed the appeal, holding that independent directors cannot be penalized for violations when not involved in day-to-day affairs and without evidence that GDR matters were placed before the audit committee. Case-Laws SEBI Wed, 06 Sep 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=445174