Mumbai: Stock market regulator Securities and Exchange Board of India (SEBI) on Thursday barred Gammon India Ltd and its chairman Abhijit Rajan from accessing capital markets for one year, in investigations into use of company funds for a rights issue and failure to make certain disclosures.
SEBI also barred Gammon, Rajan and two other entities from any transaction in the shares of Gammon Infrastructure Projects Ltd (GIPL) for three years from the date of allotment in its public issue.
Gammon officials could not be reached for comments.
The order pertained to a complaint from Reliance Silicones India Pvt Ltd alleging irregularities in Gammon India's 2001 rights issue and non-disclosure of certain details that led to understatement of loss.
“It cannot be denied that the whole scheme of transactions was crafted to enable the promoter-associated entities of Gammon to subscribe to its rights issue using company funds and to hike their shareholding in the company without using personal funds,” SEBI said in the order.
In 2001, Gammon had raised Rs 189.6 million through the rights issue.
GIPL, a subsidiary of Gammon, has filed a draft document for its initial public offering.
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