Markets regulator Sebi has barred Syncom Healthcare, its six former board members for five years from capital markets in a matter related to manipulation of a global depository receipts (GDR).
The regulator after conducting a probe found that the firm issued 4.5 million GDRs worth USD 20.74 million on September 3, 2010, on the Luxembourg Stock Exchange.
Vintage FZE, a Dubai-based firm, now known as Alta Vista International FZE, was the only subscriber to the GDR and the subscription amount was paid by obtaining loan from European American Investment Bank (EURAM).
However, the loan paid by Vintage was secured by pledge agreement between Syncom and EURAM Bank, the regulator said.
The fraudulent arrangement of loan and pledge agreement, which resulted in facilitating the subscription of GDR issue of the company by only one subscriber, was not disclosed to the exchange by the company, the regulator said in an order dated January 15.
Moreover, the firm mislead the investors into believing that the GDR issue was successful, whereas there was only one subscriber, it added.
The six persons -- Ajay S Bankda, Jyoti Bankda, Jagadish Prasad Bagaria, Bharat Kumar Doshi, Govind Das Pasari and Avichal Kasliwal -- were members of the board of directors, who approved the resolution regarding GDR issue and thereby acted as parties to fraudulent arrangement of subscription of GDR, Sebi noted.
By indulging in such activities, the entities violated PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) regulations, Securities and Exchange Board of India (Sebi) said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.