Sebi bars fugitive businessman Vijay Mallya from securities mkts for 3 yrs

Mallya, through an FII entity named Matterhorn Ventures, has indirectly trades in scrips of his group entities in India, thus concealing the true identity of his investments in securities market

The Securities and Exchange Board of India (Sebi) on Friday barred fugitive businessman Vijay Mallya from accessing the securities markets for three years.

The former liquor baron has also been barred from associating with any listed company for three years. It has directed freezing of all securities holdings, including mutual fund units.

Mallya, through an FII entity named Matterhorn Ventures, has indirectly trades in scrips of his group entities in India, thus concealing the true identity of his investments in the securities market.

The investments through the FII route are only meant for entities non-resident Indians.

“The noticee (Mallya) has glaringly resorted to making investments through the FII route by masking his identity under the garb of an FII Matterhorn Ventures to the detriment of the interest of shareholders of Indian companies,” Sebi said.

 

According to the Sebi order, the FII entity was used to deal in shares of erstwhile spirit company Herbertsons and United Spirits (USL).

“…the shareholding of Matterhorn Ventures of 9.98 per cent shares of Herbertsons actually belonged to the promoter category being totally funded by the notice,” it observed.

Through a process of mergers and acquisitions, Herbertsons became USL, which is currently owned by British multinational Diageo.

“Such acts of the noticee are not only fraudulent and deceptive but are a threat to the integrity of the securities market,” Sebi added.