The regulator finally woke up to long time misuse of funds by Transgene Biotek and barred its promoters and director from accessing the markets. Moneylife has been highlighting these issues since long
After keeping mum for almost a year, market regulator, Securities and Exchange Board of India (SEBI), has barred Transgene Biotek Ltd’s promoters and directors from accessing the markets.
In an interim ex-parte order SEBI’s Whole Time Member Rajeev Kumar Agarwal, K Koteswara Rao, chairman and managing director of Transgene Biotek, three directors Prashant Kumar Ghosh, Soma Sekhar Marthi and Narayana Murthy Pentyala as well as the company promoters K Nirmala Rao and K Srinivas.
The order also barred Transgene Biotek from issuing any more equity shares, any other instrument convertible into equity shares or any other security till further orders. The order relates to complaints about misuse of funds raised by Transgene Biotek, through the Global Depository Receipts (GDR) route.
Earlier, Moneylife has written about price manipulation in the Transgene Biotek scrip on the stock markets.
A preliminary investigation by SEBI found that out of total GDR funds, raised in two issues, of $40.5 million, $37.42 million were transferred to various entities. The fund raising was purportedly for business expansion purposes, Transgene said that the funds were transferred for transfer of technologies from the other companies to Transgene. SEBI found no evidence that showed any such transfer of technology to warrant the payments.
The order said, “In the facts and circumstances of this case, I prima facie find that the aforesaid facts prima facie indicate that the acts, omissions and concealment of Transgene and its Promoters/Directors were 'fraudulent' as defined in regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ( PFUTP Regulations).”
The order will stay in effect and the de-barred top management and directors of the company will not be allowed access to the markets until the SEBI is able to complete a full investigation into the matter.
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