Sandeep Jindal, Rajinder Jindal and Yash Paul Jindal were directors of Jindal Cortex Ltd (JCL) at the time of violation, according to a Securities and Exchange Board of India (Sebi) order.
The regulator examined the issuance of GDR by the firm and observed that it issued 5 million GDRs amounting to USD 38.75 million on the Luxembourg Stock Exchange in 2010.
During the examination, Sebi found that Vintage FZE was the only entity to subscribe the entire 5 million GDRs of the JCL, and Vintage had availed loan for the subscription amount from EURAM bank.
JCL, however, provided security towards the loan obtained by Vintage through a pledge agreement with EURAM bank.
“By entering into the pledge agreement for facilitating the subscription of its own GDR’s, JCL has played a fraud on the securities market and misled the investors and created a false impression about the company in the securities market,” Sebi said.
Regarding directors, the regulator said they certified the board resolution regarding the pledge agreement with EURAM Bank and thereby acted as party to the fraudulent scheme.
The firm and the directors violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations and, hence, barred them from accessing the securities market for 5 years. VHP HRS
News credit : Indiatimes