SEBI action against Guj Rodrel, Gangotri

Gujarat Rodrel group companies – Gujarat Rodrel Engineering Products, Gujarat Suspension and Gujarat Bonanza Auto & Steel Rolling and Gujarat Indo Lube perpetrated a fraud of circulating fake and duplicate share certificates of the group company in collusion with Manish Upadhyay.

He had colluded with the directors of the groupcompanies and managed to get large purchase orders executed through some brokers on the Bombay Stock Exchange.

After personal hearings and other investigations, SEBI decided to debar the two officials from raising money for the next five years. Gangotri Cements had come out with a public issue of 25.50 lakh equity shares of Rs 10 each for cash at par and the issue was open for subscription between January 3 and January 6. SEBI received a complaint in January 1997 alleging about fictitious nature of applications, diversion of issue proceeds, change in management and delay in transfer of shares.

The complainant also filed a petition in the Mumbai High court and the court directed SEBI to investigate the petioner’s complaint. Despite vigorous follow-up the companies failed to co-operate in the investigation and have also failed to furnish information as required from time to time. As the directors failed to co-operate, SEBI has decided to prosecute these officials under the SEBI Act.

The regulator has beentaking a tough stand against companies violating norms. After charging Hindustan Lever with insider trading, SEBI is now enquiring the price manipulation in Nestle and some other companies. It is also examining the price movement in Videocon International and the preferential issue of Saurashtra Cement.