Securities and Exchange Board of India (SEBI) has imposed a total fine of Rs 1.75 crore on Resurgere Mines and Minerals India Ltd including three individuals for indulging in fraudulent schemes for subscription of Global Depository Receipt (GDR) issued by the company.
SEBI had conducted an investigation with respect to GDR issuance by the company. It was observed that all the GDRs were subscribed by only one entity, Vintage FZE, on obtaining a loan from European American Investment Bank AG (EURAM).
As per the order, the company had pledged the entire GDR proceeds with EURAM as a security against the loan availed by Vintage from EURAM for subscribing to GDRs of Resurgere by entering into a Pledge Agreement.
However, the regulator observed that loan agreement was inseparably linked to the pledge agreement and vice versa, and both were executed consecutively.
Further, the regulator said the pre-determined fraudulent and manipulative acts of a few entities damage the integrity of the market and the genuine investors are put at risk because of the fraudulent artifice employed by the entities as observed in this case.
Consequently, a fine of Rs 1.25 crore has been imposed on Resurgere. Noticees 2, 3 and 6 are Subhash Sharma, Amit Sharma and Nitin Sethi are facing a fine of Rs 25 lakh, Rs 15 lakh and Rs 10 lakh, respectively.