- Sunday, September 08, 2024
Sebi found that Vijay Mallya routed funds into the Indian securities market through complex transactions designed to mask his identity
By: Shajil Kumar
MARKETS regulator Securities and Exchange Board of India (Sebi) has barred fugitive businessman Vijay Mallya from the securities markets and restrained him from associating with any listed firm for three years.
The market regulator took this step after it was found that Mallya routed funds into the Indian securities market through complex transactions designed to mask his identity.
An investigation conducted by Sebi covering January 2006 to March 2008 found that Mallya used Matterhorn Ventures, a Foreign Institutional Investor (FII), to secretly trade shares of his group companies – Herbertsons Ltd and United Spirits Ltd (USL) – by routing funds through various overseas accounts.
Former liquor baron routed money through various accounts with UBS AG to the Indian securities market using Matterhorn Ventures. He used different overseas entities to hide his true identity, the probe found.
Matterhorn Ventures was wrongly listed as a non-promoter public shareholder in Herbertsons even though its 9.98 per cent shareholding belonged to the promoter category, the order noted.
In her 37-page order, Sebi chief general manager Anitha Anoop 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”.
The order came after the Securities and Exchange Board of India (Sebi) investigated Mallya, who was the Chairman of the UB Group and controlling shareholder of USL, based on a tip from the UK’s Financial Conduct Authority (FCA).
Earlier in June 2018, Sebi 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 a director or key managerial position in any listed company for five years.
Further, Mallya’s appeal against this order was dismissed.
The Indian government has been attempting 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. (PTI)
