In September 2011, SEBI had restrained KII, a sub-account of Credo Capital, from dealing with securities in the domestic market in the wake of its alleged involvement in manipulating GDRs
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has allowed KII Ltd, which is accused of manipulation in issuance of financial instruments overseas, to sell securities held in its demat account, reports PTI.
KII is a sub-account of foreign institutional investor Credo Capital Plc.
In September 2011, SEBI had restrained KII from dealing with securities in the domestic market in the wake of its alleged involvement in manipulating global depository receipts (GDRs)—a financial instrument used to raise capital overseas.
SEBI said that it was modifying “to the limited extent”, the interim order issued in 2011 that had barred KII from dealing in the capital market.
“KII is permitted to sell its securities held in its dematerialised accounts and deposit the sale proceeds with any scheduled bank,” SEBI said in an order on 23rd January.
In case, KII intends to utilise any or whole of the sale proceeds, it shall seek specific permission from SEBI indicating reasons for making such request, it added.
However, SEBI noted that the trading strategy of KII in the matter was “prima facie not in the interest of the securities market” and it cannot be termed as an “innocent bystander”.
SEBI had in 2009-10 received alerts regarding large scale off-market transactions in its IMSS system in shares of IKF Technologies, Cat Technologies, Avon Corporation, Asahi Infrastructure and K Sera Sera.
The regulator had prima facie found that KII among a few other entities was cancelling the GDR of the companies and converting them into normal shares for sale in the Indian securities market, to a few selected counterparties.
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