The latest ruling comes after Sebi, in November 2014, had ordered a detailed probe in this regard. Sebi had barred the firm and its promoters - K Koteswara Rao, K Nirmala Rao and K Srinivas -- and directors Prashant Kumar Ghosh, Soma Sekhar Marthi, Narayana Murthy Pentyala from the securities markets till further directions.
At that time Koteswara Rao was the Chairman and MD. SEBI had prima facie found that Transgene Biotek transferred USD 29.92 million out of total GDR proceeds of USD 40.5 million, through a subsidiary "for undisclosed and ulterior purposes under the garb of consideration for technology transfer and for other reasons".
After raising of funds, the money was first kept in a Switzerland-based bank and some parts were later transferred to other entities in Hong Kong and Canada, among others, including to a subsidiary.
Initial probe by the Securities and Exchange Board of India (SEBI) found the claims that Transgene used the GDR proceeds to acquire certain technology from Hong Kong-based Asia First Technologies Ltd was "false and misleading".
According to SEBI, Transgene had deposited USD 40.5 million GDR proceeds in Investec Bank, Switzerland and transferred a part of the funds to Asia First from the account. From the balance sheet for financial year 2011-12 of Transgene, Sebi observed there was no addition of assets of
the kind purportedly acquired by transferring the GDR funds.


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