vijay mallya: Vijay Mallya: In the case of routing funds to the Indian securities market using offshore bank accounts with UBS AG, the Securities and Exchange Board of India (SEBI) has barred fugitive businessman Vijay Mallya from the securities markets for three years. The market regulator has also barred him from associating with any listed firm during this period. The Indian government is trying to extradite Mallya from the United Kingdom to face fraud charges related to his now defunct company Kingfisher Airlines. Mallya has been living in the United Kingdom since March 2016. An investigation conducted by SEBI from January 2006 to March 2008 found that Mallya used foreign institutional investor (FII) Matterhorn Ventures to secretly trade shares of his group companies – Herbertson Limited and United Spirits Limited (USL).
The former liquor baron routing funds to the Indian securities market through various accounts with UBS AG using Matterhorn Ventures. The probe found that he used various overseas entities to conceal his true identity. Matterhorn Ventures was wrongly listed as a non-promoter public shareholder in Herbertson while its 9.98 per cent shareholding was in the promoter category, the order said. In her 37-page order, Sebi chief general counsel Anita Anoop said “the noticee in this case (Mallya) 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 the FII route to trade in the Indian securities market in defiance of his identity and regulatory norms.” Anoop said such acts of Mallya are not only fraudulent and deceptive but also pose a threat to the integrity of the securities market. The regulator said, “The noticee has materially misrepresented the truth and concealed a material fact that the shareholding shown in the name of Matterhorn was in fact of the promoter category, as it was fully funded by the noticee, thereby violating the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.”
As a result, Sebi has barred Mallya “from accessing the securities market and further prohibited him 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”.
Also, he has been barred from “associating, directly or indirectly, in any capacity with any listed company or proposed to be listed company for a period of three years”.
The order comes after the Securities and Exchange Board of India (Sebi) initiated an investigation into Mallya, who was the chairman of the UB Group and the controlling shareholder of USL, based on information received from the Financial Conduct Authority (FCA).
Earlier in June 2018, SEBI had banned Mallya from the securities market for three years (from June 1, 2018 to May 31, 2021) due to manipulative activities including fund diversion and improper transactions in USL shares. Also, it barred him from holding any director or key managerial position in any listed company for five years. Moreover, Mallya’s appeal against this order was dismissed.
