BRS leader Harish Rao asks SEBI to probe ‘irregularities' in TGIIC deals
HYDERABAD: Alleging 'serious irregularities and possible violation of SEBI rules' by the Telangana State Industrial Infrastructure Corporation (TGIIC), BRS MLA and former minister T Harish Rao on Thursday asked the Securities and Exchange Board of India to initiate appropriate action against the corporation under the provisions of SEBI Act, 1992 and allied regulations.
Harish also wanted SEBI to investigate the process of land mortgage and loan/NCD issuance by TGIIC.
In a letter to SEBI chairman, the former minister expressed concerns about regulatory breach, misrepresentation and lack of transparency by the TGIIC, which deserve SEBI's immediate scrutiny and intervention in the public and investor interest.
'The government of Telangana has sold 400 acres of land at 75 crore per acre. The TGIIC mortgaged 400 acres of land in the Kancha Gachibowli area to raise loans via non-convertible debentures (NCDs) or through merchant bankers and financial intermediaries. However, a Supreme Court-appointed Empowered Committee has already identified this land as forest-like, potentially protected under environmental and conservation laws. The Supreme Court slammed the Telangana government for deforestation in the Kancha Gachibowli area in Hyderabad and stated that the state should either restore greenery or be prepared to send its officers to jail. Using such land as collateral may amount to material misrepresentation or fraudulent omission of facts if such status was not disclosed to lenders or potential investors,' Harish said.
The BRS leader said that the compliance concerns are: Regulation 4(2)(k) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, misleading representation or omission of material facts, Regulation 29 of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, false or misleading statements in offer documents and Section 11(2)(i) of the SEBI Act, 1992, empowering SEBI to prohibit deceptive practices in the securities market.
Harish said that it was also reported that TGIIC's annual turnover is less than Rs 150 crore, yet the corporation has raised or is attempting to raise substantial loan amounts running into hundreds or thousands of crores, he said. 'This calls into question the corporation's repayment capacity, raising concerns over its financial soundness and possible risk of default, which could mislead lenders or investors unless transparently disclosed,' Harish said in his letter.
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