SEBI has slapped a fine of over Rs 72 crore on Appealing Fabric Industries LimitedNew Delhi: Markets regulator Securities and Exchange Board of India (SEBI) on Wednesday slapped a fine of over Rs 72 crore on Winsome Fabric Industries Limited, its directors and 2 other individuals in a matter relating to issuance of worldwide depository receipts (GDR) by the firm.The directors dealing with the fine are Ashish Bagrodia, Manish Bagrodia and Satish Girotra.Winsome issued 1.29 million GDRs totaling up to $9.99 million on March 31, 2011 and Pan Asia Advisors Limited was the lead supervisor of the concern.
Arun Panchariya was the handling director of Pan Asia Advisors.Investigation revealed that Vintage FZE was the sole customer of the GDR issue.
Mukesh Chauradiya was Vintage's managing director and Panchariya was its 100 percent beneficiary.Vintage availed loan from EURAM Bank in order to subscribe to the problem.
For the loan, Winsome had actually pledged the GDR continues as collateral.Further, FII-sub-accounts connected to Panchariya transformed the GDRs and Aspire Emerging Fund sold converted equity shares worth Rs 1.11 crore in the Indian securities market.In addition, the firm made misleading business statements and likewise failed to notify the stock exchanges about the delisting of the GDRs from the Luxemburg Stock market.
Winsome triggered the financiers in the securities market in India to think that the full consideration for GDRs had been gotten by it which was not true and therefore, induced the investors in India to deal in securities, and committed scams on the investors in India, SEBI said.The directors also acted as a party to the fraudulent scheme of GDR issuance.The markets regulator has likewise disallowed Winsome, its three directors, Vintage FZE, Arun Panchariya, Mukesh Chauradiya, Pan Asia Advisors and seven funds from the securities market for differing time periods.Also, Aspire Emerging Fund has been directed to disgorge illegal gains of over Rs 1.11 crore made by way of sale of equity shares, in addition to 12 per cent interest from the date of sale of equity shares till the payment of disgorgement amount.For markets norms offenses, SEBI has levied Rs 4.4 crore fine on the firm, Rs 67 crore fine on Mr Panchariya, Rs 59 lakh fine on the 3 directors and Rs 67 lakh fine on Mukesh Chauradiya.