INSUBCONTINENT EXCLUSIVE:
Markets regulator Sebi has barred Commex Technology and two of its former directors from the capital markets in a matter related to
manipulation in issuance of a global depository receipts (GDR)
Commex has been barred for five years and its former directors -- Adi Cooper and Kishore Hegde -- for two years, as per Sebi's order dated
The regulator after conducting a probe found that the firm issued 1.91 million GDRs worth USD 9.99 million on May 25, 2009, on the
Luxembourg Stock Exchange
It was observed that the entire 1.91 million GDR were subscribed by only one entity Vintage FZE, and Commex had not submitted the correct
list of GDR subscribers to Sebi, the regulator said
The subscription amount 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 Commex and EURAM Bank
Besides, GDR issue would not have been subscribed if Commex had not given such security towards the loan taken by Vintage, Sebi said
The firm did not disclose the underlying fraudulent arrangement of the loan and pledge agreement in the GDR issue to the exchanges and by
stating that the GDR was successfully placed, it gave a misleading appearance of the firm in the market, the regulator noted
Regarding the directors, Sebi said they were members of board of directors who approved the resolution regarding GDR issue and thereby
acted as parties to fraudulent arrangement of subscription of GDR, the regulator said
By indulging in such activities, the entities violated PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) regulations and
thereby a ban was imposed on them, Securities and Exchange Board of India (Sebi) said
