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Tata Motors Let Off With Warning By SEBI In Old Case

SEBI has let off Tata Motors with a warning in an outdated case

New Delhi:

Securities and Exchange Board of India (SEBI) has let off Tata Motors Ltd with a warning to be “more careful” in its future dealings within the securities market, saying any hostile orders handed towards the corporate at this stage could not virtually serve any goal for the occasions accrued over 18 years in the past.

Apart from Tata Motors Ltd (TML), the market regulator has cautioned Niskalp Infrastructure Services, previously generally known as Niskalp Investment and Trading Ltd, to be cautious in its future dealings.

The case pertains to a backdated transaction within the shares of Global Telesystems Limited (now generally known as GTL Ltd) and Global E-Commerce Services Ltd, an unlisted firm that merged with GTL in 2001.

“For the events that accrued more than eighteen years ago, any adverse orders passed against TML at this stage though legally will be valid but may not practically serve any purpose since TFL (Tata Finance), which brought the Rights Issue, has been merged with TML 17 years ago with effect from June 24, 2005, and is no longer in existence,” SEBI Whole Time Member SK Mohanty mentioned in his 54-page order.

Further, the regulator famous that the current board of administrators of TML is totally completely different from all the administrators of TFL, who’re all senior residents and have lengthy since retired from the board of TFL and Niskalp.

“In view of the aforesaid mitigating factors and the facts that substantial and positive remedial measures have been proactively taken by TML and Niskalp against the erring officials and the subscribers of the rights issue of TFL were given options twice to exit from the said Rights Issue by TFL if they wish to do so, the end of justice would be met if the Noticee nos 1 (TML) and 11 (Niskalp) are warned to be careful in their future dealings in the securities market,” SEBI mentioned.

It was alleged that TFL hid the true and proper details from the traders and disseminated unfaithful and deceptive assertion of details concerning the financials of Niskalp, which was one of many subsidiary firms of TFL, within the letter of supply of its rights situation.

Further, to indicate the inflated and fictitious revenue within the books of account of Niskalp, it was alleged that TFL has knowingly engaged within the acts of backdating the transactions of sale-purchase and accounting entries with respect to the scrip of GTL and GECS within the books of accounts of Niskalp and consequently within the supply doc of the TFL, to present a greater image of the accounts of Niskalp within the ‘letter of supply’ of TFL to induce buy/subscription to the rights situation of TFL by its shareholders.

The order got here after SEBI obtained a grievance in October 2002 from Tata Finance, alleging situations of irregular transactions in securities primarily based on backdated and fictitious contract notes or payments, for the sale and buy of shares of Global Telesystems Ltd and Global E-Commerce Services Ltd by DS Pendse and AL Shilotri, who executed the trades on behalf of Niskalp Investment and Trading Ltd (now generally known as Niskalp Infrastructure Services Ltd) and TFL, respectively.

Following the grievance, SEBI carried out an investigation into the alleged backdated transactions within the shares of GTL and GECS to determine a attainable violation of the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

(Except for the headline, this story has not been edited by NDTV workers and is printed from a syndicated feed.)

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