The ban has been imposed for a period ranging from 1-3 year.
An investigation was conducted by Sebi with respect to the GDR (Global Depository Receipt) issuance by the company during October 1-31, 2006.
The regulator in its investigation observed that Soma had issued GDRs amounting to USD 17.29 million.
It was noted that the entire GDR proceeds were subscribed to only one entity -- Whiteview Trading Corporation (Whiteview).
It was also observed that the subscription amount was paid by Whiteview by obtaining a loan from BANCO EFISA, S A - a bank based in Lisbon, Portugal.
Later, it was revealed that Whiteview signed a credit agreement with BANCO for payment of the subscription of GDRs.
The loan was further secured by Soma itself by securing the GDR proceeds, Sebi said.
Thereafter, the company had facilitated subscription of its own GDR by entering into an arrangement where Whiteview, the only subscriber to the GDR issued by Soma, obtained the loan from Banco for subscribing the issue, and Soma pledged the GDR proceeds with Banco for securing the loan taken by Whiteview from Banco, it added.
The noticees were part of the board meeting wherein, approvals were made to, among others, authorising Banco to use the GDR proceeds as security in connection with the loan and Patel had signed the account charge agreement on behalf of Soma.
The individuals were also the directors of Soma during the period when corporate announcements were made by the company regarding the GDR issue, which were false and misleading.
By doing so, they violated the provisions of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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