MUMBAI: United Phosphorus (UPL) and its main promoter Jaidev Shroff have settled a case of unauthorised routing of funds to a foreign entity to perk up the company’s stock price with Sebi by paying a little over Rs 20 crore. This amount includes the unfair notional gain made by UPL which was disgorged, the interest on the gain and also the penalty for violating Sebi rules.
This relates to a case in 2006 when Shroff used UPL’s Mauritius-based subsidiary Bio-Win Corp to float an entity named Tulippe Universal. This entity invested in Matterhorn Ventures, a sub-account of Matterhorn Advisory Singapore, which was a Sebi registered FII. This foreign fund in turn bought UPL stocks to artificially jack up its price. This inflated price of UPL stocks had resulted in gains for Shroff, Sebi’s show cause notice had alleged.
UPL and Shroff approached Sebi to settle the matter after paying a fine that was accepted by a Sebi committee. As part of the settlement process Sebi will not move ahead with the adjudication process, the order said.