MUMBAI: The Securities and Exchange Board of India (Sebi) on Tuesday barred 19 domestic and foreign entities from securities markets for alleged manipulation in issuances of global depository receipts (GDRs). The stock markets regulator also warned several others including foreign institutional investors (FIIs) against GDR manipulation.
The regulator slapped a 10-year ban on K Sera Sera and Asahi Infrastructure & Projects.
Notably, Sebi also warned at least 26 entities including European American Investment Bank AG that all their future dealings in Indian markets should be strictly as per regulations.
The regulator has been probing the misuse of GDRs for routing black money back to India for which the role of more than 50 individuals and companies was under the scanner.
In the cases under scanner, the companies had shown raising funds without actually involving real investors, hinting at possible routing of black money.
The modus-operandi typically involves creating an intricate web of entities in offshore locations for multi-layered transfers of funds before bringing them back to India.
GDR is a popular financial instrument used by listed companies in India, as also in many other countries, to raise funds denominated mostly in US dollar or euros.
GDRs are bank certificates issued in more than one country for shares of a company, which are held by a foreign branch of an international bank. While shares trade on a domestic stock exchange, which happens to be in India in the present case, they can be offered for sale globally through the empanelled bank branches.
Apart from K Sera Sera and Asahi, 12 other entities would face ban for 10 years. These include Vintage FZE (now known as Alta Vista International), Ashok Panchariya, Rajesh Pavithram, Hussain Sattaf, and Dinesh Bhanushali.