(SEBI) India’s capital market regulator Securities and Exchange Board of India has penalized the major media and entertainment, business group. Such as K Sera Sera Ltd, also known as KSS Ltd for having defrauded Indian investors under Section 12A(a), (b), (c) of SEBI Act read with Regulations 3(b), (c), (d), and Regulations 4(2)(c), (f), (k) and (r) of PFUTP Regulations over the issuance of Global Depository Receipts in the year 2007 and 2009. It has made the company liable to Rs. 12.1 crore while Hussain Sattaf, the directors, and managing director Rajesh Pavithran, the managing director have been asked to pay Rs. 1 crore each.
Following a thorough examination by the authorities, it was discovered that KSS had issued GDR issues on March 30, 2007, and May 15, 2009, respectively, with Pan Asia Advisors Ltd serving as the book-running lead manager for each of these companies. Further, that Arun Panchariya was the company’s founder, director, and only shareholder of Pan Asia.
According to the order copy, the investigation report (IR) alleges that Mr. Panchariya designed and arranged the whole process of KSS GDR issuances to the detriment of Indian investors, whereby loans were secured for the subscription of KSS GDRs on both occasions.
Mr. Panchariya was also reported to be the Managing Director, a 100% shareholder, and an authorized signatory of Vintage, the company with whom KSS had a loan and pledging agreement for both of its GDR issuance. He used certain domestic businesses connected to him to convert the GDRs into underlying shares, which he then sold on the Indian securities market with the aid of some Foreign Institutional Investors (FIIs). KSS is also accused of violating Sections 11C(3) and 11C(6) of the SEBI Act by neglecting to submit some information required by SEBI and supplying false information.
The “Order” can be read hereunder –