No evidence found, Sebi disposes of probe against Unitech ex-promoters

New Delhi, June 21

Market regulator Sebi on Friday disposed of its investigation against Unitech’s erstwhile promoters Sanjay Chandra and Ajay Chandra in a case pertaining to the alleged routing of funds to the Indian securities market using overseas bank accounts as it found no evidence.

Suo motu investigation

Sebi had conducted a suo motu investigation against Unitech’s erstwhile promoters Sanjay Chandra and Ajay Chandra in a case pertaining to the alleged routing of funds to the Indian securities market using overseas bank accounts as it found no evidence

Sebi had conducted a suo motu investigation to ascertain whether there was any routing of funds to Indian securities market by the two Chandra brothers through the bank accounts with UBS AG, in violation of the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.

The period of investigation was from April 2006 to March 2008. In the investigation report, the regulator alleged United Corporate Parks was connected to the noticees/Unitech. It also alleged that Ajay Chandra was a non-executive director in UCP, while Unitech had a 4.52 per cent stake in UCP through its subsidiary Nectrus Ltd — a foreign subsidiary of Unitech whose account was held with UBS Singapore Branch. Thereafter, Sebi issued a show cause notice on May 3, 2023, against the noticees (Sanjay Chandra and Ajay Chandra).

During the probe, it was observed that the account of Unitech Overseas, a foreign subsidiary of Unitech, was maintained with UBS bank in Zurich. In its 25-page order on Friday, Sebi said, “…the whole allegation in the matter is that noticees (Sanjay Chandra and Ajay Chandra) transferred the funds from Unitech to its overseas subsidiary viz Unitech Overseas Ltd, and then these funds were transferred among the other foreign subsidiaries of Unitech, including the connected/related entity viz UCP/its subsidiaries using UBS accounts in different countries”.

Sebi Chief General Manager G Ramar said in the order that these funds were ultimately routed from UBS accounts to Pluri, which were then finally used to buy the shares of Unitech, directly or indirectly, through funds/FIIs like Sophia Growth Fund and Deutsch Bank Mauritius Ltd (DBML). Pluri (Pluri Emerging Companies PCC) was incorporated in Mauritius as a private limited company by shares, and is a protected cell company.