India's market regulator, Sebi, has imposed a three-year ban on fugitive billionaire Vijay Mallya for illegally manipulating stock prices and profiting from fraudulent transactions. Mallya's holdings in Indian stocks and mutual funds have been frozen, and he is barred from holding any directorial positions in listed Indian companies.
Sebi's investigation revealed that Mallya exploited the foreign institutional investment (FII) route by using foreign entities and bank accounts with UBS AG to trade in Indian securities. This allowed him to conceal his identity and manipulate the market for his own benefit. The regulator found that between January 2006 and December 2008, Mallya gained nearly $5.7 million through these deceptive practices.
According to Sebi's FII regulations, only non-residents are permitted to invest in the Indian securities market through this route. Mallya's actions, which involved using overseas entities to trade and channel funds, violated these regulations and misled investors about his involvement.
In addition to the trading restrictions, Mallya has been barred from associating with any listed Indian company as a director due to the severity of his fraudulent activities, which Sebi described as a significant threat to market integrity.
Sebi Delays Crizac Ltd's IPO Approval
In a separate development, Sebi has returned the draft documents for Crizac Ltd's proposed Rs 1,000 crore IPO, causing delays in the process. The IPO was an Offer For Sale by promoters rather than a new issue. Despite the company’s strong market position and financial performance, the reasons for Sebi’s return of the documents remain unclear.