SEBI issues Rs14 crore demand notice to Jindal Cotex in GDR issuance case

13 Dec 2022 , 08:10 AM

Jindal Cotex Ltd received a notification from SEBI on Monday , demanding more than Rs14 crore in payment for manipulating the issuance of global depository receipts (GDR). Jindal Cotex Ltd. (JCL) has been given a 15-day deadline by the regulatory body to pay over Rs14 crore, including interest and collection fees.

In the event of non-payment, it will recover the money by seizing and selling the company’s real estate, both movable and immovable. According to SEBI, the company may also have its assets and bank accounts attached, and its directors may still be detained.

The warning was sent after JCL was given a fine by the Securities and Exchange Board of India (SEBI) but failed to pay it.

The regulator fined JCL a total of Rs10.3 crore in its decision from January 2020, while its directors and chairman Sandeep Jindal will pay Rs20 lakh in fines, Rajinder Jindal will pay Rs10 lakh in fines, and Yash Paul Jindal will pay Rs10 lakh in fines.

After conducting an inquiry between June and July 2010, SEBI issued the order after discovering that the company had issued 5 million GDRs totalling $38.75 million in June 2010.

SEBI noted during the investigation that only Vintage FZE had subscribed to all of the GDRs (now known as Alta Vista International FZE).

Vintage paid the subscription fee for the GDR after getting a loan from the European American Investment Bank (EURAM).

The regulatory body discovered that a pledge arrangement between JCL and EURAM Bank secured the loan that Vintage had paid back.

It was discovered that Jindal had issued fraudulent and deceptive corporate announcements.

Regarding the pledge agreement made with EURAM Bank for the purpose of subscribing to GDRs, the delisting of GDRs from the Luxembourg Stock Exchange, and the termination of the GDR program–information that was price-sensitive and might have affected the scrip’s price–JCL failed to notify stock exchanges.

For feedback and suggestions, write to us at [e-mail]