Beckons issued GDRs worth USD 5 million in July 2008, with the objective of establishing a subsidiary in the UAE.
An investigation by Sebi found that Vintage FZE was the sole subscriber to the GDRs of Beckons, and the firm had pledged the GDR proceeds as collateral against loan availed by Vintage.
Beckons also failed to inform the BSE about delisting of the GDRs from the Luxembourg Stock Exchange.
The company reported misleading information to the stock exchange which contained information in a distorted manner.
“The scheme of issuance of GDRs was fraudulent,” Sebi noted.
In addition, the firm failed to disclose the contingent liability in the annual report for the financial year 2008-09, as required under accounting standard.
“Noticee No. 1 to 4 along with the company have acted fraudulently by devising a pre-meditated scheme to enable Vintage to avail a loan from Euram Bank for subscription to the GDR of Beckons,” Sebi said regarding the directors in a separate order.
Noticees refer to the directors of the firm during the relevant period of investigation — Gurmeet Singh, I S Sukhija, Chandra Prakash and H S Anand.
All the transactions and activities were undertaken behind the back of the shareholders and other investors of the securities market, Sebi said.
For acting in violation of several market norms, Sebi levied a total fine of Rs 10.25 crore on Beckons Industries, while the officials are facing fine in the range of Rs 15 lakh to Rs 1 crore each.
