The Securities Appellate Tribunal (SAT) has directed market regulator Sebi to pass the final order against Pan Asia Advisors Ltd and its promoter Arun Panchariya within six months in a case relating to their alleged involvement in manipulation of Global Depository Receipts (GDR).
In an appeal filed with the tribunal,Pan Asia Advisors and Panchariya had challenged an order passed by Sebi (Securities and Exchange Board of India) in January 2012 which debarred the two entities from the securities market.
As per the order dated September 13,the tribunal has said,”… the appeal is disposed of with a direction to the Board (Sebi) that the process of issuing a supplementary/fresh show cause notice may be completed expeditiously and a final order be passed within six months from today.”
The tribunal reached the decision on the basis that Sebi has collected some additional material in the ongoing investigations and will issue a supplementary/fresh show cause notice on which the entities will then submit their reply.
The case relates to large scale off-market transactions in scrips of a few companies — IKF Technologies,Avon Corporation,CAT Technologies,Asahi Infrastructure and K Sera Sera.
Sebi was alerted that Foreign Institutional Investors were converting the GDRs underlying the shares of the companies held by them into equity shares to sell in the Indian market and most cancellations happened within a short period of time of their issue.
Preliminary findings had pointed toward an elaborate scheme to manipulate trading in these securities. It was also found that Pan Asia was the manager or arranger to almost all of the issues and that the proceeds of the GDR issues were deposited in European American Investment Bank AG (Euram Bank),Austria.
Sebi had thereafter passed an ex-parte order in September 2011 later confirming the same in January 2012.