SEBI v. Aftek Ltd and others (GDR issue, 2023)

Judgment entered

✓ Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In February 2023 a SEBI whole time member restrained the company Aftek for three years and two of its directors for one year each over a 2003 GDR issue of about USD 15 million whose subscribers were financed by a bank loan secured on the company's own proceeds. Four other directors were let off on the fraud charge for want of evidence.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

This order of 17 February 2023 was made by SEBI whole time member S. K. Mohanty. It names Aftek Limited and nine directors during the relevant period, among them the managing director Ranjit Dhuru and Pramod Broota, who signed for the company. Three directors had died by the time of the order.

The case concerns the issue on 7 February 2003 of 13,33,100 global depositary receipts raising about USD 14.99 million, listed in Luxembourg. SEBI found that two British Virgin Islands companies, Kendo Associates and Highgrove, each borrowed from a Lisbon bank on the same date, USD 4 million and USD 5 million, to subscribe to the issue, and that Aftek pledged its entire GDR proceeds to the bank as security under an account charge agreement signed by Mr Broota under a power of attorney from Mr Dhuru. It alleged the company hid this arrangement, so investors were misled into believing the issue had been genuinely taken up by independent foreign investors. The charges were fraud under section 12A of the SEBI Act and the PFUTP Regulations, 1995 and 2003.

The whole time member found the credit agreements and the pledge inseparably linked, and the issue unlikely to have been subscribed without Aftek's security. He held the company, Mr Dhuru and Mr Broota had concealed the arrangement and acted fraudulently. For four others, including three non-executive directors, he found the evidence insufficient to hold fraud, though he criticised them for passive and careless oversight. Proceedings against the three who had died abated.

The directions were a three-year restraint on the company from the securities market, including from raising money from the public, and a one-year restraint on each of Mr Dhuru and Mr Broota, with their holdings frozen during the period. No monetary penalty was imposed in this order.

The record does not show whether the order was appealed, where the GDR proceeds went, or any criminal case.

This library tags the matter as misleading issuer disclosure, because the finding is that the issuer concealed the self-financing of its GDR issue from investors. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Misleading issuer disclosure — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2023-02-17 SEBI order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order
• SEBI order (PDF)

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.