[ By Bobby Anthony ]The Securities & Exchange Board of India (SEBI) has restrained officials of Resurgere Mines & Minerals India Ltd from the capital market for up to three years for flouting market norms by manipulating the issuance of its global depository receipts (GDR).Among those banned include the company’s Chairman & Managing Director Subhash Sharma, and its whole time director...
The Securities & Exchange Board of India (SEBI) has restrained officials of Resurgere Mines & Minerals India Ltd from the capital market for up to three years for flouting market norms by manipulating the issuance of its global depository receipts (GDR).
Among those banned include the company’s Chairman & Managing Director Subhash Sharma, and its whole time director Amit Sharma, besides its non-executive independent director Nitin Sethi.
The company had issued GDRS worth USD 5.21million in June 2010 to raise USD 53.75 million.
A SEBI investigation found that the company had engaged in a fraudulent arrangement to facilitate financing of its GDR issue and made misleading disclosures to its investors.
It was revealed that all GDRs were subscribed by only one entity, namely Vintage FZE, after obtaining a loan from the European American Investment Bank AG (EURAM).
The company also acted as a guarantor and deposited the entire GDR proceeds with EURAM Bank as security against the loan for subscription of GDRs issued by it.
The company misled its investors that it has got a good reputation in terms of investment potential due to which foreign investors enthusiastically subscribed to its GDR, whereas in reality, its GDRs were subscribed by Vintage with the help of the company itself, according to SEBI’s findings.