PAN ASIA ADVISORS INTERNATIONAL CORPORATE FINANCE Vs. SECURITIES AND EXCHANGE BOARD OF INDIA SEBI BHAVAN

JUDGEMENT

(1.) THE present appeal raises an important issue as to whether Global Depositories Receipts, i.e. GDRs., created and issued by foreign banks, namely, Deutsche Bank and Bank of New York, and listed on foreign stock exchanges, namely, Luxemburg Stock Exchange and the New York Stock Exchange, albeit at the instance of Issuer Companies located in India, by a Lead Manager registered in the UK and governed by regulations framed and enforced by a foreign regulator, are amenable to the jurisdiction of an Indian regulator namely, the Securities and Exchange Board of India ("SEBI"), in case any allegations of irregularity/illegality are leveled against the Lead Manager registered in the UK. The appeal is preferred by two Appellants against the impugned order dated June 20, 2013 passed by the Respondent. Appellant no. 1, namely, Pan Asia Advisors Limited is a company registered under the laws of the UK having its registered office at 42, Mincing Lane, London. It is registered with the Financial Services Authority, the federal financial regulator in the UK and is mainly in the business of advising investors in relation to financial products outside India, including services offered in relation to issuance of GDRs abroad in the capacity of an International Corporate Advisor or a Lead Manager. Appellant no. 2, namely, Mr. Arun Panchariya, is a non -resident Indian residing in Dubai, UAE who was looking after the affairs of Appellant no. 1 till September 2011, when he is stated to have resigned in the wake of the ad interim order of SEBI dated September 21, 2011.

(2.) IMPUGNED order dated June 20, 2013 restrains the Appellants from accessing the securities market for 10 years for the violation of Regulations 12A(a) -(c) of the SEBI Act, 1992 read with Regulations 3(c) -(d), and Regulations 4(1), 4(2)(c), 4(2)(e) -(f), 4(2)(k) and 4(2)(r) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as PFUTP Regulations).

(3.) THE main portion of the impugned order, as contained in paras 16 to 23 thereof, is reproduced hereinbelow for the sake of convenience: -