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Seven years on, Sebi still probing Vijay Mallya for round-tripping

According to a Sebi note, on May 24, 2007, Mallya had bought 6,33,333 shares of USL and sold the same day 4,08,333 shares and made $5.51 million in profitsSebi note, on May 24, 2007, Mallya had bought 6,33,333 shares of USL and sold the same day 4,08,333 shares and made $5.51 million in profits.

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As banks rue slow moving debt recovery process, the stock market regulator, Securities and Exchange Board of India (Sebi), is yet to complete an investigation against the liquor baron Vijay Mallya even after seven years.

In 2009, Sebi had got information from the United Kingdom regulator, Financial Service Authority, now known as Financial Conduct Authority (FCA), regarding trading in United Spirits Ltd (USL) stock through six UBS bank accounts by Mallya.Sebi had got information from the United Kingdom regulator, Financial Service Authority, now known as Financial Conduct Authority (FCA), regarding trading in United Spirits Ltd (USL) stock through six UBS bank accounts by Mallya.

Zee Business has a copy of an internal draft of Sebi note in which it has mentioned about six UBS bank accounts – 364567 (Highland Trading), 369939 FG-Personal A/c, Birchwood Hills (389458) Plc, Suncoast Valley (389459) Plc, Bayside Inn (389469) Plc, and Venture New Holding (138154). The draft also has trading details clearly mentioning that on May 24, 2007, Mallya bought 6,33,333 shares of USL and sold the same day 4,08,333 shares and made $5.51 million in profits.

Sources said two former executive directors of Sebi, then heading FII Division and Investigation Division, had visited London for investigating the case.Sebi, then heading FII Division and Investigation Division, had visited London for investigating the case.

When contacted, FCA said in a mail, "We are not able to comment."FCA said in a mail, "We are not able to comment."

Both Sebi and USL did not comment when dna reached out to them for their response.Sebi and USL did not comment when dna reached out to them for their response.

Round-tripping is when promoters and other connected parties inflate share prices by buying shares at higher price using funds channelled abroad via inflated invoices and payments to shell companies overseas.

Apart from the USL share trading, the UK regulator had alerted Sebi on the round-tripping by many Indian companies and promoters. Sebi, however, filed an affidavit on January 30, 2014, in Bombay High Court, and denied about the UK regulator's alert on other companies and promoters barring Anil Dhirubhai Ambani Group in a reply via writ application. However, Sebi answered to a RTI applicant, Ramsagar Yadav, on February 7, 2016, that,

"The matter referred by you in your RTI application has not reached a logical conclusion and hence there is no information to be provided."USL share trading, the UK regulator had alerted Sebi on the round-tripping by many Indian companies and promoters. Sebi, however, filed an affidavit on January 30, 2014, in Bombay High Court, and denied about the UK regulator's alert on other companies and promoters barring Anil Dhirubhai Ambani Group in a reply via writ application. However, Sebi answered to a RTI applicant, Ramsagar Yadav, on February 7, 2016, that, "The matter referred by you in your RTI application has not reached a logical conclusion and hence there is no information to be provided."

Even at the time of withdrawal of the writ petition on February 5, 2015, Sebi said it had commenced investigation in this matter. In case of ADAG matter, the group paid Rs 50 crore after a consent order.Sebi said it had commenced investigation in this matter. In case of ADAG matter, the group paid Rs 50 crore after a consent order.

Apparently, Sebi did not share this information with other investigation agencies.Sebi did not share this information with other investigation agencies.

A senior official from Enforcement Directorate said, "We have sought a report from the stock market regulator. They are yet to submit one."

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