Violation of Market Norms: SEBI imposes Rs 1.15 crore fine on Pharma Company
During the investigation, SEBI revealed that the loan paid by Vintage was secured by pledge agreement between Syncom and EURAM Bank.
New Delhi: Markets regulator Sebi on Friday imposed a total penalty of Rs 1.15 crore on Syncom Healthcare Ltd and its officials for violation of various markets norms while manipulating issuance of global depository receipts (GDR).
During the investigation between August 2010 and September 2010, Sebi noted that the firm had issued 4.5 million GDR amounting to approximately Rs 96 crore on September 3, 2010.
The regulator found that Vintage FZE was the only entity to have subscribed to 4.5 million GDR and the subscription amount was paid by obtaining loan from European American Investment Bank (EURAM).
The investigation revealed that the loan paid by Vintage was secured by pledge agreement between Syncom and EURAM Bank.
Further, "the arrangement of loan and pledge agreement which resulted in subscription of GDR issue of the company, was not disclosed to the exchanges and company reported misleading news to the stock exchanges which contained information in a distorted manner and might have influenced the decision of investors," Sebi said.
Thereby, the scheme of issuance of GDRs was fraudulent.
Also, Syncom provided a false list of GDR subscribers.
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The firm and its officials have violated provisions of listing agreement and failed to comply with Securities Contract Regulation Act and Prohibition of Fraudulent and Unfair Trade Practices norms, Sebi said.
Accordingly, Sebi levied a fine of Rs 25 lakh on Syncom Healthcare and Rs 15 lakh each on its officials -- Ajay S Bankda, Jyoti Bankda, Jagadish Prasad Bagaria, Bharat Kumar Doshi, Govind Das Pasari and Avichal Kasliwal.
In a separate order, the Securities and Exchange Board of India (Sebi) also imposed a penalty of Rs 10 lakh on an individual for engaging in non-genuine transactions in the scrip of Moryo Industries Ltd.
Sebi noted that individual Badrilal Birla "by engaging in such non-genuine transactions, manipulated the price of the scrip of Moryo and also created a misleading appearance of trade in the scrip."