SEBI had passed an ad interim ex-parte order dated September 21, 2011, in the matter of market manipulation using GDR issues against several entities including Shri Arun Panchariya(hereinafter referred to as AP) and Pan Asia Advisors Limited (now known as Global Finance and Capital Limited).
SEBI subsequently completed its investigation regarding the role of Pan Asia and Shri Arun Panchariya in the matter of market manipulation using GDR issues. It was inter-alia observed that Shri Arun Panchariya had entered into a fraudulent arrangement with the promoters of certain issuer companies viz. Asahi Infrastructure & Projects Ltd., IKF Technologies Ltd., Avon Corporation Limited, K Sera Sera Ltd., CAT Technologies Ltd. and Maars Software International Ltd. to issue GDRs. The cross referenced agreements signed by entities of AP and by the issuer company with European American Investment Bank AG , Austria led to GDR proceeds received by company being pledged against loans raised by entity of AP. The names of foreign investors disclosed to Exchanges in India were found to be fictitious. Therefore together, AP and Indian companies have created a scheme to mislead the investors about the inflow of foreign investment through GDRs and that the companies were found as favourable investments by foreign investors. Thereafter these GDRs were converted through sub-accounts controlled by AP and the shares so converted were dumped in the Indian securities markets to the detriment of the Indian investors.
Shri S. Raman, Whole Time Member has passed final order dated June 20, 2013 against Shri Arun Panchariya and Pan Asia Advisors Limited in the matter. Directions have been passed against Shri Arun Panchariya and Pan Asia Advisors Limited prohibiting them from rendering services in connection with instruments that are defined as securities (as in section 2(h) of Securities Contracts Regulation Act, 1956) in the Indian market or in any way dealing with them, directly or indirectly, for a period of 10 years, from the date of the order. Pan Asia and Panchariya have also been prohibited from accessing the capital market directly or indirectly for a period of 10 years, from the date of the order.