SEBI Bars Aptech, Managing Director From Securities Market On GDR Manipulation

Markets regulator Securities and Exchange Board of India has restrained Aptech Ltd. and its managing director from accessing the securities market in a matter related to manipulation in issuance of global depository receipts.

While the firm has been barred for six months, its managing director Pramod Khera has been banned from the securities market for five years. SEBI investigated the issuance of GDR by the company for the period October-November 2003 and found that the firm had issued 38,40,000 GDRs amounting to $14.4 million in November 2003 on Luxembourg Stock Exchange.

SEBI noted that the entire GDRs were subscribed by only one entity, Willow Brooks S.A, after obtaining a loan from Banco Efisa, S.F.E., S.A. Aptech had pledged its entire GDR proceeds with Banco Bank as a security against the loan availed by Willow for subscribing to GDR. For this, the managing director of Aptech, Pramod Khera, signed an agreement with the bank.

In addition, the company reported misleading news to the stock exchange which contained information in a distorted manner. By doing so, the firm and its managing director violated the Prohibition of Fraudulent and Unfair Trade norms. Consequently, the entities have been restrained from accessing the securities market. During the period of restraint, Khera cannot hold any position as a director or key managerial personnel in any listed company and SEBI registered intermediary.