SEBI Asks Urja Global To Get 'Certificate of Authenticity' for All Regulatory Filings
Moneylife Digital Team 17 May 2022
For the first time, market regulator Securities and Exchange Board of India (SEBI) has asked Urja Global Ltd—which is found guilty of price manipulation and false statements—to get a 'certificate of authenticity' for its disclosures to the exchange. In the 'humiliating action', the company will need to get a company secretary to verify its statements except for accounts. In 2019, Moneylife had written about Urja Global's brazen manipulation of share price through false regulatory statements and lenient treatment meted out to the company by the regulators.
The market regulator also barred for two years, Urja Global and the company directors and key management persons (KMPs), Yogesh Kumar Goyal, Sunil Kumar Mittal, Priya Bhalla and Avinash Kumar Agarwal, from markets. The company is also prohibited from accessing the securities market to raise money from the public. The case relates to Urja Global's so-called agreement to supply Zacobite, a non-existent material, to Nippon Shinyaku Co Ltd. The Japanese company had already denied signing any contract with Urja Global for the supply of Zacobite.
In an order, Ananta Barua, a whole-time member (WTM) of SEBI, had asked Urja Global to obtain certification of authenticity of any corporate announcement from a practising company secretary for the next three years. 
"The company should include in such certificate the status of previous corporate announcements made by it in the last 10 years under Regulation 30 of the LODR Regulations, except for the periodical financial results declared from time to time," the order says. 
On 13 July 2019, Urja Global informed the BSE about entering into an agreement with Nippon Shinyaku Co Ltd, of Japan, to supply a product called Zacobite for five years. This would help it develop a domestic and international market, it said.
SEBI says, "...prior to the said corporate announcement, the closing price of the scrip on BSE during 8th July to 12 July 2019 ranged between Rs2.15 to Rs2.18. However, immediately after the corporate announcement, the scrip closed at Rs2.60 and Rs3.05 on 15th July and 16 July 2019, respectively. I find that the said corporate announcement had a direct positive impact on the price and volume in the scrip. It thus appears that the corporate announcement dated 13 July 2019 was made with an aim to induce investors to deal in the scrip of the company."
After Nippon Shinyaku denied any agreement on 5 September 2019, Urja Global claimed that it realised that it was defrauded. However, it filed a complaint to the economic offences wing (EOW) only on 9 January 2020.
"The company has failed to display any serious efforts to recover the money and/ or initiate appropriate legal proceedings in this regard," SEBI order says.  
The order also points out that, while Urja Global informed about an invoice dated 9 May 2019 for US$3,000 (about Rs10.50 lakh) for five packs of Zacobite as sample, it claims to have made full payment on 24 April 2019 itself. Further, while Sanjeeta Sharma claimed to be a representative of Savlamtech Ltd, which was supplying Zacobite to Nippon Shinyaku, the payments were made to Babu Enterprises, a third party. "No reason or any communication in this regard with the third parties or Ms Sharma has been submitted by the company for allegedly transferring the funds to a third party."  
The SEBI order observed, "It is very unusual that the company, being a listed corporate entity, purportedly agreed to enter into an agreement with a foreign corporate entity for supply of a product (Zacobite) which it had no idea about, that too for an agreement value of US$6,55,00,000 which could have given rise to civil liability of enormous proportion in case of default by the company." 
"It further defies logic as to why a foreign company would approach an Indian company to import a product through a third party in India (Salvamtech Ltd) when it could directly import such product from the third party itself...even assuming that Zacobite was a real product having application in pharmaceutical industry, the company's primary business had no connection with the purported export of Zacobite. Considering all these factors in totality, it appears highly unlikely that a listed company like Urja Global could fall prey to a fraud of this nature, as claimed by the company," the SEBI WTM says.
In 2018, Urja Global had announced two tie-ups with Chinese companies. In March this year, it disclosed to the BSE and NSE that it has a MoU (memorandum of understanding) with the Andhra Pradesh government to manufacture electric cars and lithium ion batteries in the state. Given its finances and how the stock price is languishing, that, too, seems like a tall claim. (Read: Stock Manipulation Is Rampant & Unchecked: Here's Why)
Urja Global's share price has been on a rollercoaster ride for several years. It touched its 52-week high of Rs34.85 on 14 January 2022 and 52-week low of Rs5.86 on 30 July 2021. 
Urja Global ended Tuesday nearly 5% down at Rs14.95 on the BSE, while the 30-share Sensex was at 2.54% up at 54,318.47 points.
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