NEW DELHI: The Securities and Exchange Board of India (Sebi)on Friday banned fugitive businessman Vijay Mallya from trading in securities market and being associated with any listed company for a period of three years. The decision was made in connection with the channeling of funds to the Indian securities market through overseas bank accounts with UBS AG.
The authorities have been making efforts to bring back Mallya, from the United Kingdom to face fraud charges related to his now-defunct company Kingfisher Airlines. He has been living in the United Kingdom since March 2016.
According to the Sebi the fugitive tycoon is banned from, “associating himself with any listed company or proposed to be listed company, in any capacity, directly or indirectly, for a period of three years”. Vijay Mallya is prohibited from engaging in any securities-related transactions, either directly or indirectly.
What is the matter?
Sebi conducted an investigation spanning from January 2006 to March 2008, which revealed that Mallya had utilized Matterhorn Ventures, a Foreign Institutional Investor (FII), to discreetly trade shares of his group companies, namely Herbertsons Ltd and United Spirits Ltd (USL). The funds for these transactions were routed through various overseas accounts.
The probe discovered that the former liquor baron had channeled money to the Indian securities market using Matterhorn Ventures, with the funds passing through multiple accounts held with UBS AG. In an effort to conceal his true identity, Mallya employed different overseas entities to carry out these transactions.
Sebi Chief General Manager Anitha Anoop in her 37-page order, said the “noticee (Mallya) in the instant case, has devised a scheme to indirectly trade in the shares of his own group companies through layered transactions/fund flow using his overseas related companies through FII route in order to keep his identity masked and trade in the Indian securities market in defiance of the regulatory norms”.
Such acts of Mallya are not only fraudulent and deceptive but are a threat to the integrity of the securities market, Anoop added.
“The noticee indeed had misrepresented the truth and concealed a material fact known to him that the shareholding shown in the name of Matterhorn actually belonged to the promoter category as the same was totally funded by the noticee thereby, violating the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations,” the regulator noted.
As a result, Sebi has barred Mallya from “accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, for a period of three years”.
The Securities and Exchange Board of India (Sebi) has taken action against Vijay Mallya, the erstwhile head of the UB Group and majority shareholder of United Spirits Limited (USL). The regulatory body launched a probe into Mallya’s dealings after receiving relevant data from the Financial Conduct Authority (FCA).
In a previous order in June 2018, Sebi had prohibited Mallya from participating in the securities market for a period of three years, spanning from June 1, 2018, to May 31, 2021.
The ban was imposed due to Mallya’s involvement in manipulative activities, which included diversion of funds and improper transactions related to USL shares. Additionally, Sebi barred him from holding the position of director or key managerial personnel in any listed company for a duration of five years.
Mallya’s attempt to appeal against the aforementioned order was unsuccessful, as his appeal was dismissed.
According to stock exchange data, he holds an 8.1% stake in United Breweries, the maker of Kingfisher beer, and serves as the company’s chairman. Additionally, he possesses a 0.01% stake in United Spirits, the producer of Smirnoff vodka.
(With inputs from agencies)
The authorities have been making efforts to bring back Mallya, from the United Kingdom to face fraud charges related to his now-defunct company Kingfisher Airlines. He has been living in the United Kingdom since March 2016.
According to the Sebi the fugitive tycoon is banned from, “associating himself with any listed company or proposed to be listed company, in any capacity, directly or indirectly, for a period of three years”. Vijay Mallya is prohibited from engaging in any securities-related transactions, either directly or indirectly.
What is the matter?
Sebi conducted an investigation spanning from January 2006 to March 2008, which revealed that Mallya had utilized Matterhorn Ventures, a Foreign Institutional Investor (FII), to discreetly trade shares of his group companies, namely Herbertsons Ltd and United Spirits Ltd (USL). The funds for these transactions were routed through various overseas accounts.
The probe discovered that the former liquor baron had channeled money to the Indian securities market using Matterhorn Ventures, with the funds passing through multiple accounts held with UBS AG. In an effort to conceal his true identity, Mallya employed different overseas entities to carry out these transactions.
Sebi Chief General Manager Anitha Anoop in her 37-page order, said the “noticee (Mallya) in the instant case, has devised a scheme to indirectly trade in the shares of his own group companies through layered transactions/fund flow using his overseas related companies through FII route in order to keep his identity masked and trade in the Indian securities market in defiance of the regulatory norms”.
Such acts of Mallya are not only fraudulent and deceptive but are a threat to the integrity of the securities market, Anoop added.
“The noticee indeed had misrepresented the truth and concealed a material fact known to him that the shareholding shown in the name of Matterhorn actually belonged to the promoter category as the same was totally funded by the noticee thereby, violating the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations,” the regulator noted.
As a result, Sebi has barred Mallya from “accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, for a period of three years”.
The Securities and Exchange Board of India (Sebi) has taken action against Vijay Mallya, the erstwhile head of the UB Group and majority shareholder of United Spirits Limited (USL). The regulatory body launched a probe into Mallya’s dealings after receiving relevant data from the Financial Conduct Authority (FCA).
In a previous order in June 2018, Sebi had prohibited Mallya from participating in the securities market for a period of three years, spanning from June 1, 2018, to May 31, 2021.
The ban was imposed due to Mallya’s involvement in manipulative activities, which included diversion of funds and improper transactions related to USL shares. Additionally, Sebi barred him from holding the position of director or key managerial personnel in any listed company for a duration of five years.
Mallya’s attempt to appeal against the aforementioned order was unsuccessful, as his appeal was dismissed.
According to stock exchange data, he holds an 8.1% stake in United Breweries, the maker of Kingfisher beer, and serves as the company’s chairman. Additionally, he possesses a 0.01% stake in United Spirits, the producer of Smirnoff vodka.
(With inputs from agencies)
