Markets regulator SEBI slapped a fine of over Rs 10 crore on Sybly Industries Ltd in a matter related to manipulation in issuance of global depository receipts (GDR).
Understanding Sybly Industries Case
Since, SEBI observed one entity Vintage FZE subscribed 1.51 million GDR. The loan received from European American Investment Bank Vintage paid subscribed amount for GDR. Through a pledge agreement loan paid by Vintage secured. Hence, Global Depository Receipt is one of the crucial part.
Though, if Sybly Industries Limited had’nt given securities towards Vintage loan GDR not subscribed. “Such fraudulent arrangement was not disclosed to the stock exchange market in a true and complete manner but was reported as misleading news and would have influenced decision of investors,” the regulator noted.
Additionally, the fraud arrangement violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations and by not informing to the exchanges the delisting of GDR in April 2013, which was price sensitive information, the firm violated Listing Agreements, SEBI said. Besides, the firm did not disclose the pledge agreement in the financial statements for the corresponding year and thereby contravened Listing Agreements.
Global Depository Receipt is a bank certificate issued in more than one country. The shares are in foreign country. GDR traded on American Stock Exchange. Global Depository Receipt priced in local currency of exchanges. Therefore, GDR dominated by raising the capital.
Final Words regarding Sybly Industries Case
Securities exchange Board of India regarded as the main regulatory body. It imposed a fine on Sybly Industries Limited. SEBI manipulated the issuance of Global Depository receipt. GDR forms a major part in the company. It had slappeda fine of rs. 10 crore on Sybly Industries Limited. While manipulating the global depository receipt fraud is related to it. A lot of GDR violation took place in the company. The foreign entities fined for manipulating GDR. Violations in GDR are on huge type. The company subscribed a huge type of GDR.
