Sebi Bans Chromatic India Officials
On Monday, the market regulator Sebi bans Chromatic India Limited from the Capital Market. It bans the firm for 5 years for the GDR issue. As of the report, the company manipulates its global depository receipts (GDRs). The securities and exchange board of India also excluded officials of the company such as whole-time directors and non-executive independent directors.
According to the reports, the regulator has banned the whole-time director Vinod Kumar Kaushik for three years and non-executive independent directors Vipin Sharma and Ajay Sethi for one year.
Why Sebi Bans Chromatic India?
As of 2010, Sebi had investigated Chromatic India for the GDR issue. While it founded that the company misled investors’ believe. It told the investors as the USD 4.2 million GDR Issue was successful. Until the issue ought only one Vintage FZE subscriber. As of the source, the GDR’s were subscribed by Vintage with the help of the company itself. It also misled the investor’s trust by entering the securities market.
Sebi said that by agreeing to facilitate the subscription of its GRDs, the company has played a fraud on the securities market and misled the investors. Moreover, it has created an artificial impact on the company in the stock market.
According to the reports, the firm received loans from Erum (European American Investment) Bank. The purpose of these loans by way of a loan agreement for making a payment towards a subscription to Chromatic’s GDRs issue. Moreover, it has assured its complete funds as security by accessing a promised deal with Bank.
By indulging in such activities, the entities violated PFUTP regulations, Sebi said.
Therefore, the regulator has suspended the Chromatic company from entering the Securities market. It also banned them by issuing prospectus, offer document or announcement of requesting money from the public. Moreover, Sebi prevented the firm from buying, selling actions or otherwise dealing in securities as directly or indirectly in any manner, for five years.
The regulator has denied the company’s whole-time director and non-executives for one to three years from the capital market.