TaxTMI 
TaxTMI 
2020 (2) TMI 609
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....under Section 19 read with Sections 11(1), 11(4) and 11B of the SEBI Act, 1992, the appellants have been prohibited from associating with the securities market directly or indirectly for a period of five years from the date of the order. 2. M/s. Jindal Cotex Limited ("JCL" for convenience), Appellant No. 1 is a company which came out with an allegedly vitiated issue of Global Depository Receipts ("GDRs" for convenience) in 2010. Appellant No. 2, 3 and 4 were Managing Director, Whole Time Director and Chairman of JCL at the relevant time. 3. Facts relevant to the matter are the following:- (a) SEBI conducted an investigation relating to issuance of 5 million GDRs valued at US$ 38.75 million by JCL on June 30, 2010. The said GDRs were lis....
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....otice issued by SEBI on May 21, 2018 it was also alleged that JCL provided a false list of GDR subscribers. Therefore, it was alleged that the entire scheme involving a Pledge Agreement and the announcement that the GDRs were successfully subscribed without disclosing the Pledge Agreement to the investors resulted in misleading information to the public and thereby adversely impacting the investors and, therefore, the scheme of issuance of GDRs was fraudulent violating the provisions of Section 12A(a), (b), (c), of SEBI Act, 1992 read with Regulations 3(a), (b), (c), (d), 4(1), 4(2)(f), (k), (r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practice relating to Securities Market) Regulations, 2003 ("PFUTP Regulations, 2003" for conven....
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....lative manner by certain other entities, JCL had done a genuine GDR issue. No GDRs were sold in the domestic market before the entire money was withdrawn by the appellant-company from its account with EURAM Bank. Similarly, the entire issue proceeds were received by the appellant-company and utilized for the purpose for which the GDR issue was made. The only allegation, according to the learned counsel for the appellants, that could be pressed is that the Pledge Agreement was not disclosed to the Stock Exchange (BSE). This was, it was contended, because there was no requirement for disclosing the Pledge Agreement under the Listing Agreement. As regards the list of subscribers of GDRs it was contended that the appellant(s) submitted the list....
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.... minutes of the Board meeting of the Noticee No.1 held on April 26, 2010. On perusal of the said minutes of the Board meeting, I note that no such resolution to open account with EURAM Bank and use the funds in such account as security in connection with loan .etc., was stated in the said minutes. Neither was there any agenda item, nor any discussion took place in the meeting of Board of Directors on April 26, 2010 in respect of the purported resolution. I also note that, even though the Noticees have filed detailed reply/written submissions dated February 05, 2019 along with many other enclosures, but conveniently not furnished, either the minutes, agenda or Board resolution (as submitted with EURAM Bank) of the meeting of the Board of Dir....
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....ed by the appellants along with some other entities cannot be faulted. In this context, it is relevant to note that in our order in the matter of PAN Asia Advisors Limited (Supra) (Lead Manager) and Vintage (subscriber) whose beneficial owner was Arun Panchariya were all found to be guilty of the violations of Indian Securities Laws under the PFUTP Regulations, 2003. The same has been the modus operandi in respect of Cals Refineries Limited (Supra) though the entities connected therein were different. 10. The contention that Pledge Agreement was not required to be disclosed under the Listing Agreement is not correct as the Listing Agreement, which forms the very basis of a disclosure based regulatory regime, requires every material informa....