SEBI bans Lyka Labs for 3 years for manipulating GDR to raise Rs 37 crore
Sebi noted that the company had issued GDRs on December 7, 2005 for raising USD 5 million.
New Delhi: Markets regulator Sebi on Friday restrained Lyka Labs Ltd from accessing the securities market for three years in a matter pertaining to manipulation in the issuance of global depository receipts (GDR).
During the period of restraint, the firm cannot access the market directly or indirectly including by issuing prospectus, offer document or advertisement soliciting money from the public and is further prohibited from buying, selling or otherwise dealing in securities, the regulator said.
Sebi noted that the company had issued GDRs on December 7, 2005 for raising USD 5 million.
The investigation conducted by Sebi revealed that the firm had engaged in a fraudulent arrangement for facilitating the financing of the subscription to its GDR issue and had made misleading disclosures to the market and to the investors.
On the basis of authorization given by the board of directors, the company facilitated the subscription to its GDR issue by Fusion Investment on the strength of a loan obtained by it from Banco Bank against which the GDR proceeds of the company were kept as security.
By doing so, the firm has breached the provisions of Sebi Act and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.
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