September 03, 2001
PR No. 148/2001
Securities and Exchange Board of India carried out investigations in to the allegations of manipulations with respect to the public issue of VR Mathur Mass Communications Ltd., a company having its registered office at Hyderabad. The investigations reveled that the promoter and Managing Director of the company Shri V. R. Mathur indulged in several manipulations in violation of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995. Investigations further revealed that the lead managers to the issue viz., STI Finance Ltd., and Rusoday and Company Ltd., also failed to exercise due care and diligence and thereby violated the code of conduct prescribed to them under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.
The investigations revealed further that the prospectus issued by the company contained several misstatements which are material in nature.
Therefore, Securities and Exchange Board of India launched criminal prosecution against the company and its managing director Shri V. R. Mathur, the aforesaid merchant bankers and other individuals, who aided and abetted the managing director of the company, by filing a complaint before the Special Judge for Economic Offences, Hyderabad under the provisions of Securities and Exchange Board of India Act, 1992. Prosecution has also been launched under the provisions of Companies Act, 1956 against the all the directors of the company for authorising prospectus, which contained misstatements.