INSUBCONTINENT EXCLUSIVE:
New Delhi: Markets regulator Sebi on Thursday restrained officials of Resurgere Mines and Minerals India Ltd from accessing securities
market for up to three years for flouting market norms by manipulating the issuance of global depository receipts (GDR).
The company had
issued USD 5.21 million GDRs in June 2010 for raising USD 53.75 million.
Pursuant to an investigation conducted by Sebi, it was found that
the firm engaged in a fraudulent arrangement for facilitating financing of its GDR issue and made misleading disclosures to investors.
Sebi
noted that all the GDRs were subscribed by only one entity, Vintage FZE, on obtaining a loan from European American Investment Bank AG
(EURAM).
The company acted as guarantor and deposited the entire GDR proceeds with EURAM Bank as security against the loan for subscription
of GDRs issued by the company.
"By entering into such an arrangement, the noticeeshave led the investors in India to believe that the issuer
Resurgere has got a good reputation in terms of investment potential because of which foreign investors have enthusiastically subscribed to
its GDR, whereas in reality, the GDRs were subscribed by Vintage with the help of the company itself," Sebi said.
Noticees refer to chairman
and managing director Subhash Sharma, whole time director Amit Sharma and non-executive independent director Nitin Sethi.
Sebi has banned
the officials from accessing securities market for varying periods between one year to three years