SEBI bars Kashyap Technologies Ltd and six others from Securities market for five years 

1)  In a recent crackdown on GDR violations, SEBI has barred Kashyap Technologies Ltd (“KTL”) and six others from securities market for five years. This is a one of the various orders which SEBI has passed recently.

2)   In case of KTL, SEBI investigated the GDR issue made by KTL during December 2007. It was found that firm issued 0.49 million GDRs worth $16.5 million on the Luxembourg Stock Exchange.

3)   During the investigation it was observed by SEBI that entire 0.49 million GDRs were subscribed by only one entity (viz. Clifford Capital Partners).

4)   The subscription amount for GDRs was paid by Clifford Capital Partners after securing a loan from Lisbon-based bank (viz. Banco Efisa).

5)   However, the Clifford Capital Partners had pledged the GDR proceeds to the bank against the loan given to it for subscription of GDRs.

6)   Besides, the firm gave a false and misleading corporate announcement that its GDR issue was successfully allotted whereas the same was subscribed by only one entity.

7)   Further, it said Clifford had the knowledge of the fact that KTL itself was acting as a security provider for the loan being taken by it for subscribing the GDR issue, hence the claim that it was not a party to the scheme is not acceptable.

8)   Moreover, $ 10.39 million was transferred to Clifford by KTL for default in repayment of loan to the bank.

9)   The regulator found that the Clifford acquired the GDR, to the extent of $ 10.39 million for free and at the cost of investors of KTL which cleared the loan of Clifford from the GDR proceeds.

10)  SEBI has barred the five directors from securities market. SEBI said they were the members of the board of directors who approved the resolution authorizing Banco to use GDR proceeds as a security in connection with the loan given to Clifford Capital Partners and same was acted upon by KTL. Thus It was inferred that they were part of the fraudulent arrangement of facilitating the subscription of its own GDR.

11)  In similar cases relating to GDR violation, SEBI has taken action against Commex Technologies Ltd, Sybly Industries Ltd and Himachal Futuristic Communications Ltd.

12)  In case of Commex Technologies Ltd SEBI debarred the company and its two directors from securities market for a period of five years.

13)  In case of Sybly Industries Ltd SEBI imposed a fine of Rs 40 lakhs on four directors (Rs 10 lakhs for each director) and company paid an amount of Rs 10.30 crores to settle the matter.

14)  With respect to GDR violations in case of Himachal Futuristic Communication Ltd, SEBI has settled the matter with Himachal Futuristic Communication Ltd and its Mr. Vinay Maloo, Director of Himachal Futuristic Communication Ltd for a settlement amount of Rs 1,14,06,356 crores and Rs 1,36,00,000 respectively.