SEBI has taken major action against Vijay Mallya and banned him.
The government has taken significant action against fugitive Vijay Mallya. This action has been taken by the securities market regulator SEBI. Apart from debarring fugitive businessman Vijay Mallya from the securities markets, SEBI has also banned him from joining any nested company for three years. The SEBI took this action in connection with the case of remittance of money to the Indian stock market using foreign bank accounts at UBS AG. The Indian government is trying to extradite Mallya from Britain to face fraud charges related to his now defunct company Kingfisher Airlines. Mallya has been living in Britain since March 2016.
I was sending money like this
The Securities and Exchange Board of India (SEBI), in its investigation for the period January 2006 to March 2008, found that Mallya had arranged for foreign institutional investors to secretly trade in the shares of his group companies – Herbertsons Limited and United Spirits Limited (USL). The investors (FIIs) used Matterhorn Ventures. For this, money was sent through various overseas accounts. Former liquor baron Mallya used Matterhorn Ventures to invest money in the Indian stock market through various accounts at UBS AG. He used various foreign institutions to hide his real identity.
SEBI’s 37-page order
The Sebi order said Matterhorn Ventures was wrongly listed as a non-promoter public shareholder of Herbertsons while its 9.98 per cent stake was in the promoter category. SEBI Chief Director General Anita Anup in her 37-page order said the noticee in this case (Mallya) used the FII route to trade in the Indian stock market by concealing his identity and ignoring regulatory norms for his related foreign companies.
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In this way, he planned to deal indirectly in shares of his own group companies through multi-level transactions. He said that this action of Mallya is not only fraudulent and misleading but is also a threat to the integrity of the stock market. In such a situation, SEBI has prevented Mallya from giving access to the stock market. He has been banned from joining any listed company for three years.
