SEBI v. Pentasoft Technologies Ltd and others (GDR issue, 2022)

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 October 2022 a SEBI whole time member found that Pentasoft Technologies misled investors in 2002 by not disclosing that the proceeds of its USD 6.48 million GDR issue went back to the subscriber, but cleared the subscriber and seven directors of fraud. The only direction is that the successor company look into recovering the money.

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

A SEBI whole time member decided this matter on 14 October 2022. The first noticee is Pentasoft Technologies Limited, now merged into Pentamedia Graphics Limited. The others are the subscriber, Teigh Holdings Limited of the British Virgin Islands, and six directors and officials.

On 3 May 2002 the company issued 16.2 million GDRs at USD 0.40, about USD 6.48 million, listed in Luxembourg. SEBI alleged under the repealed 1995 PFUTP Regulations that Teigh borrowed the whole sum from a Lisbon bank to subscribe, that the company pledged an equal amount of deposit as security, and that the money was then sent back to Teigh, so that the issue brought in no real capital while shareholders were told otherwise. The show cause notice was issued in 2018.

The order finds that in August 2002 the company instructed the bank to move USD 6.48 million back to Teigh, contrary to the use of proceeds in the listing particulars, and that it did not tell the exchange or shareholders, nor show it in its financial statements. It holds that this concealment of price-sensitive information misled investors and violated Regulation 5(1) of the 1995 regulations. However, it holds that the wider fraud charge was not sustained because intent to deceive was not shown.

Because of that, the directors who signed the board resolutions or the account charge agreement were cleared, and the proceedings against all seven other noticees were disposed of; Teigh had been dissolved in 2014. The only direction is that Pentamedia Graphics, through its audit committee, consider whether GDR proceeds are outstanding and take steps to recover them within a year of identification. No monetary penalty or bar is imposed in this order.

The record does not show how much, if anything, was recovered, or whether the order was appealed. An earlier order of March 2022 had already restrained Pentamedia Graphics for one year. The order says copies may be sent to the RBI, the Enforcement Directorate and the corporate affairs ministry.

This library tags the matter as misleading issuer disclosure (GDR proceeds returned to the subscriber without disclosure). 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. 2022-10-14 SEBI final 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.