Market watchdog Sebi has banned Vijay Mallya from the Indian securities markets, curbing him from tying up with any listed firm for three years. This comes after it was found that the fugitive businessman, who is now in the UK, had routed funds to Indian markets using overseas bank accounts through layered transactions.
A Sebi probe revealed that Mallya secretly trades shares of his group's United Spirits Ltd (USL) and Herbertsons Ltd via Foreign Institutional Investor (FII) Matterhorn Ventures. He routed the funds using different accounts with UBS AG to mask his identity, according to an order.
The order was issued after the market regulator received a tip from the Financial Conduct Authority (FCA) regarding transactions of Mallya, who was the Chairman of the UB Group and controlling shareholder of USL.
Despite Matterhorn Ventures' 9.98 per cent shareholding in Herbertsons making it a promoter, it was wrongly listed as a non-promoter public shareholder, says the 37-page order issued by Sebi Chief General Manager Anitha Anoop.
Anoop said the scheme devised by Mallya in defiance of the regulatory norms under Prohibition of Fraudulent and Unfair Trade Practices) Regulations is not only fraudulent and deceptive but are a threat to the integrity of the securities market.
She said Sebi has restricted Mallya's access to the securities market, banning him from buying, selling or dealing in securities directly or indirectly for three years. He is also not allowed to be associated with any listed firm or proposed to be listed company during the period.
In June 2018, the market watchdog banned Mallya from the securities market for three years between June 1, 2018, and May 31, 2021, for diverting funds and irregularities found in USL share transactions. He was also banned from holding a director or key managerial position in any listed company for five years.
The Centre has been trying to extradite Mallya from the UK, where he has been residing since 2016. He has been booked over charges linked to his Kingfisher Airlines.
