The Securities Appellate Tribunal (SAT) has asked market regulator Sebi to pass a final order in six months in a case related to CG Power and Industrial Solutions, banning former chairman of the company Gautam Thapar and three other former officials from the securities market. It was done.
Besides Thapar, the other officers banned were VR Power’s former chief financial officer VR Venkatesh and former directors Madhav Acharya and B Hariharan.
The SAT’s decision against Thapar, Hariharan and others against a SEBI confirmation order passed in March 2020 came to the tribunal, under which it allowed Thapar, Venkatesh, Acharya and Hariharan to buy, sell or otherwise deal in securities in any manner. Was banned from doing. Directly or indirectly, until the next order “.
However, he was allowed to liquidate up to 25% of the value of the securities held by him.
The confirmation order was followed by an interim order given by SEBI in September 2019, which barred capital market officials for “serious” inaccurate statements of accounts as well as diversion of funds. In addition, it ordered a forensic audit of the company.
Noting that the restraining order was in place from September 2019, Sait said that it cannot be allowed to continue forever.
“Enough time has already passed for the defendant to analyze the forensic report.
“We accordingly direct the defendant (SEBI) to issue a show cause notice, if any, within four weeks from today and thereafter, six months from the date of receiving the reply as per law after giving an opportunity for hearing. To decide the matter within, ”the SAT said in its order passed on 6 April.
The Securities and Exchange Board of India (SEBI) conducted an inquiry to ascertain whether there was any violation of the provisions of the securities laws by the company and its directors or promoters during the period 2016-2019.
SEBI, Prima Fesi, had noted that the chairman as well as some directors, employees of CG Power and related entities had committed irregularities. These include the use of some of the company’s assets, including co-borrower and / or guarantor, as collateral to enable third parties to obtain loans without proper authorization from CG Power’s board.
They allegedly transacted through subsidiaries, promoter-affiliated companies and other connected parties for the ultimate benefit of the companies belonging to the promotional group.
In addition, they allegedly used separate accounting heads to hide payments made by CG Power, facilitating promoter-affiliated companies with interest-free advances and entering into suspicious transactions.
The regulator stated in the interim order that the transactions are prima facie “designed to withdraw / withdraw money from a listed company that is genuinely that of its shareholders”.
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