On Tuesday, Sebi barred Morepen Laboratories from the securities market for one year for making a misleading disclosure regarding the issuance of global depository receipts (GDRs).
The regulator made certain observations regarding some arrangement made by certain entities in 2003 with respect to the issuance of GDRs, and hence, investigated into this issue.
It was found that the GDRs of Morepen were subscribed by two entities--Solsec Company and Seviron Company--both incorporated in the British Virgin Islands.
These two entities had obtained loan via a credit agreement from Lisbon-based Banco Efisa, S.F.E., S.A. Further, Morepen had secured the loan obtained by Solsec and Seviron from Banco by pledging the GDR proceeds through "Account Charge" agreement with Banco
Sebi stated that Morepen did not inform BSE regarding the execution of the account charge agreement in March 2003 with Banco, which acted as a security for the loans availed by the subscribers and also that the GDR issue was subscribed by only two entities—Solsec and Seviron.
Morepen, instead, made a misleading disclosure to the BSE that the issue of GDRs was successfully subscribed.
Sebi said, “GDR issue with an arrangement that it pledged the GDR proceeds for the loans availed by the subscribers for subscribing to the GDR issue of Noticee no 1 (Morepen) and made false and misleading disclosures.”
Morepen Laboratories Ltd is currently trading at Rs18.55 down by Rs3.2 or 14.71% from its previous closing of Rs21.75 on the BSE.
The scrip opened at Rs19 and has touched a high and low of Rs19.65 and Rs18 respectively. So far 29,92,634 (NSE+BSE) shares were traded on the counter.
The current market cap of the company is Rs978.42cr.
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