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The alleged share round-tripping in the accounts of UBS by select corporate houses has landed at the high court here. A group of lawyers have filed a petition in the high court against the Securities and Exchange Board of India (Sebi) and the Union of India seeking an early investigation into the matter.
Additionally, the petitioners highlighted that they intend to refer their own findings into the matter to the government-constituted special investigative team (SIT) on black money.
Share round-tripping is when companies use foreign institutional investors' (FII) sub-accounts to channelise money into India to manipulate their own stock prices.
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In this case, the companies spanning sectors such as real estate, mining and liquor have allegedly used UBS sub-accounts via the Mauritius route. This matter is reportedly under investigation by the markets regulator and has recently been referred to the enforcement directorate on whether there was a violation of the Prevention of Money Laundering Act.
This investigation is based on a tip-off received from the UK's Financial Services Authority (FSA), which named companies that have accounts and FII sub-accounts with UBS and might have used them for bringing money into India via transactions that are illegal under India laws.
The petition was heard by a Bench headed by Justice Anoop Mehta and Justice Nitin Jamdar. Union of India was represented by Parag Vyas. However, no one appeared on behalf of Sebi and, hence, the hearing got adjourned for two weeks with the court directing that a notice be sent to Sebi with respect to the next hearing.
UBS replied to a query from Business Standard saying it doesn't have any comments. An email query to Sebi did not elicit any response.
According to the affidavit submitted in the court, Sebi had in January this year said it had not received any information from the FSA, except for the Anil Dhirubhai Ambani Group, that warrants any investigation.
"We have requested the FSA to forward any information, if any against any other entities," stated the affidavit.
According to reports, Sebi sent out notices to the companies and the bank in April this year.
The SIT on black money had recently asked the general public and those in the know of cases related to alleged tax evasion and money laundering to send their findings to it.
