Securities and Exchange Board of India (SEBI): Madhabi Puri Buch, a Whole-Time Member addressed the issue of global depository receipts issued by Transgene Biotek Ltd. in order to defraud investors.
SEBI received a complaint against Transgene Biotek Ltd. alleging of fraud by issuing global depository receipts and misutilisation of proceeds by transferring the same for undisclosed and ulterior purposes under the garb of consideration for technology transfer to defraud the investors. SEBI conducted inquiry in order to find the probable impact of allegations on the securities market in India and on the interests of investors. SEBI passed an ad-interim ex-parte order which was later confirmed where based on the preliminary inquiry, six entities were restrained from accessing the securities market and trading in securities.
SEBI conducted a detailed inquiry in the entire GDR issued by Transgene Biotek Ltd. to ascertain the violation of securities laws. It found no adverse evidence or finding in respect of violation of provisions of SEBI Act and PFUTP Regulations against 3 entities with respect to their role in the scheme of diverting of the GDR proceeds of TBL and their endeavor to legitimatize the proceeds was found. Thus the confirmation order was liable to be revoked and the proceeding against the other entities ought to be continued. Therefore, under Section 19 of the SEBI Act read with Sections 11, 11(4) and 11-B of the SEBI Act confirmatory order was revoked. [Transgene Biotek Limited, In re,2018 SCC OnLine SEBI 167, order dated 06-11-2018]