The order comes pursuant to an investigation conducted by Sebi in connection with several Indian companies that had issued GDRs in overseas market with the intention of defrauding Indian investors.
Sebi found that Sanraa Media is one such company which had fraudulently pledged its GDR proceeds with Lisbon-based bank Banco Efisa S.F.E., S.A., as collateral against loan availed by the subscriber of the GDRs.
The regulator noted that Sanraa had issued 10 million GDRs worth USD 27.50 million in May 2008 on the Luxembourg Stock Exchange. Clifford Capital Partners AGSA was the only entity that subscribed to the entire GDR issue.
The subscription amount for GDRs was paid by Clifford after securing a loan from Banco Efisa and Sanraa had pledged the GDR proceeds to the bank against the loan given to Clifford for subscription of GDRs, Sebi noted.
For this, Sanraa's board had approved the resolution regarding the loan agreement to Clifford and thus was part of the fraudulent arrangement of facilitating the subscription of its own GDR.
Besides, the firm gave a false and misleading corporate announcement that its GDR issue was successfully allotted to five entities whereas the same was subscribed by only one entity.
By doing so, the entities violated various market norms and accordingly fined the entities.
Out of the total fine levied by Sebi, a penalty of Rs 10.3 crore is imposed on the firm and Rs 5 crore on chairman Annaswami Venkatramani. Five directors are liable to pay jointly or severally a fine of Rs 1 crore.
The directors facing the penalty are Uma Karthikeyan, Sukumar Subramanian, Rajeev Agarwal, Krishnan Rajagopal and Rajendran Sivashankaran. SRS ANU