The Securities and Exchange Board of India is learnt to have sent notices to 12 corporate entities in India seeking details on their account with UBS, a leading global bank and details of any trade in shares of group companies through their foreign accounts, also known as round-tripping.
A senior official with a corporate house which has been served the notice told that the Sebi letter states, “We understand that you have an account with UBS and you have raised some money. We would like to know the amount raised and the number of group company shares bought by you,” the source said.
Another source said that Sebi has in all sent notices to 12 business houses which is part of a routine enquiry to check if the companies have made any such investment in a group company through foreign accounts which is not allowed under domestic capital market regulations. It is also used as a means to manipulate share prices.
Well known as round-tripping in the financial circles, Sebi had passed a consent order in January 2011 against Reliance Anil Dhirubhai Ambani Group for allegedly using a Mauritius based fund to invest in a group company. In the consent order Sebi had ordered the group to pay a pay Rs 50 crore as penalty.
Sebi had reportedly sent the notices to several entities including United Spirits, GMR, Essar Group, Unitech, Sterlite and DLF among others.
While a Sebi official declined to comment on the issue, a GMR spokesperson said that the company has not received any such notice from the capital markets regulator. Even the DLF spokesperson denied having received any such notice from Sebi.
“We wish to reiterate that at no stage have we ever indulged in the activities mentioned in your news item, or been the subject of any investigation in this regard or received any query from Sebi on this matter,” said DLF in its statement on Tuesday.
Essar Group has also denied having made any such transaction. “Essar entities have never dealt in its own shares through any FII/UBS banking channels,” said a Essar Group spokesperson.