Coffee Day Enterprises fund diversion case: Sebi imposes Rs 1 cr fine on Mysore Amalgamated Coffee
New Delhi, Mar 27: Capital markets regulator Sebi on Monday imposed a Rs 1 crore penalty on Mysore Amalgamated Coffee Estates for 'aiding and abetting' Coffee Day Enterprises in the diversion of funds to the tune of Rs 3,535 crore.
The company was directed to pay the fine within 45 days, according to an order passed by the Securities and Exchange Board of India (Sebi).
Mysore Amalgamated Coffee Estates Ltd (MACEL) and Coffee Day Enterprises Ltd (CDEL) are controlled by the same set of persons -- Late VG Siddhartha (VGS) and his family members.
''Noticee 1 (MACEL) was nothing but a pass-through entity which has effectively aided and abetted VGS in the act of diverting funds to the tune of Rs 3,535 crore from subsidiaries of CDEL to Noticee 1 and from Noticee 1 to entities controlled by VGS & his relatives and has thus violated the provisions of SEBI Act and PFUTP) Prohibition of Fraudulent and Unfair Trade Practices) Regulations,'' Sebi said in its order.
Such diversion of funds was never disclosed to the investors till the time of the death of VGS, it added.
Accordingly, the regulator has imposed ''a penalty of Rs 1 crore on Noticee 1 i.e, Mysore Amalgamated Coffee Estates Limited''.
VG Siddhartha, who was the Chairman of the Coffee Day Group, reportedly committed suicide in July 2019. It was reported that he had left behind a suicide note addressed to the board of directors and Coffee Day family wherein he revealed that he was in deep debt.
After Siddhartha's passing away, the CDEL board engaged the services of Ashok Kumar Malhotra, retired DIG of the Central Bureau of Investigation, and Agastya Legal LLP in September 2019 to investigate the company's books of accounts and its subsidiaries.
Sebi had also initiated an investigation into the matter on its own to ascertain whether funds were diverted to related entities, which resulted in a possible violation of regulatory norms and the period of investigation was from April 2018 to March 2020.
In January, Sebi had slapped imposed a penalty of Rs 26 crore on Coffee Day Enterprises, which runs Cafe Coffee Day, for the diversion of funds from subsidiaries to a company related to promoters.
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Trump says EU has until July 4 to approve last year's trade deal or it will face higher tariffs
Washington (AP): President Donald Trump has said in a social media post that goods from the European Union would face higher tariff rates if the 27-member bloc fails to approve last year's trade framework by July 4.
The announcement on Thursday appeared to be a deadline extension after the president said last Friday that EU autos would face a higher 25 per cent tariff starting this week. Trump made the updated announcement after what he described as a "great call" with European Commission President Ursula von der Leyen.
Still, the US president was displeased that the European Parliament had yet to finalize the trade arrangement reached last year, which was further complicated in February by the US Supreme Court ruling that Trump lacked the legal authority to declare an economic emergency to impose the initial tariffs used to pressure the EU into talks.
"A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO!" Trump posted. "I agreed to give her until our Country's 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels."
It was unclear from the post whether Trump was implying that the tariff rates would jump on all EU goods or the increase would only apply to autos.
His latest statement indicates he might be backing away from his earlier threat on EU autos by giving the European Parliament several more weeks to approve the agreement.
Under the original terms of the framework, the US would charge a 15 per cent tax on most goods imported from the EU.
But since the Supreme Court ruling, the administration has levied a 10 per cent tariff while investigating trade imbalances and national security issues, aiming to put in new tariffs to make up for lost revenues.
