Mumbai: The regulator SEBI Thursday barred Pan Asia Advisors and its promoter Arun Panchariya from capital market for ten years for alleged market manipulation using global securities issued by six Indian companies.
The case relates to irregularities that were observed in the issuance of global depository receipts of Asahi Infrastructure & Projects, Avon Corporation, Cat Technologies, IKF Technologies, K Sera Sera and Maars Software International.
The Securities and Exchange Board of India (SEBI) in its order today barred Pan Asia Advisors and its promoter from accessing the capital market, directly or indirectly, for a period of 10 years.
These entities were alleged to have been involved in dabba trading, or off-market transactions.
The two entities were barred from the securities market by SEBI through an interim order in 2011.
SEBI Whole Time Member S Raman in the order also said that they have already undergone the debarment for a period of about one year and eight months.
"In view of this factual situation, it is clarified that the debarment already undergone by Pan Asia and Panchariya pursuant to the aforementioned SEBI order shall be reduced while computing the period of debarment being imposed vide this order," he said.
Under the fraudulent scheme, Panchariya arranged loans for the subscription to GDRs, subscribes to GDRs, and sells the GDRs to FIIs/ Sub accounts who, in turn, sold shares received from conversion of GDRs in Indian securities market, the order said.
"The GDRs thus issued and sold to Indian investors through steps explained below are hereinafter referred to as Structured GDRs and the complete scheme is referred to as AP GDR Scheme," it said.
According to SEBI, Pan Asia and Panchariya by employing fraudulent arrangement with regard to the subscription of GDRs and thereafter monetising them through the sale of underlying shares of the GDRs have violated various rules.
The two entities have "acted in a manner which is fraudulent and deceptive and to the detriment of the interest of investors in the Indian securities market," it added.
Further, the order observed this was not the first Panchariya has been involved in violating securities laws.
Way back in November 2009, the market regulator had imposed monetary penalty on Panchariya for creating false and misleading appearance of trading in Alka and his involvement in publication of premature/misleading positive announcements.