Harish Seeks Sebi Action Against TGIIC
Harish Rao said there are serious questions on the TGIIC raising funds by mortgaging the land which is forest-like, a fact also established by the Supreme Court appointed Central Empowered Committee.
HYDERABAD: Former minister T Harish Rao has sought an urgent investigation by the Securities and Exchange Board of India (SEBI), into “serious irregularities and potential violations of Sebi regulations by the Telangana State Industrial Infrastructure Corporation (TGIIC) and the government of Telangana.”
In a letter to Sebi chairman on Thursday, Harish Rao listed a series of potential violations of the Sebi guidelines and regulations by TGIIC in relation to the corporation mortgaging 400 acres of Kancha-Gachibowli land, and raising thousands of crores under likely false pretenses.
Harish Rao said the potential violations include Sebi’s Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003, Issue and Listing of Non-Convertible Securities Regulations, 2021, Listing Obligations and Disclosure Requirements Regulations, 2015, and SEBI (Merchant Bankers) Regulations, 1992.
Harish Rao said there are serious questions on the TGIIC raising funds by mortgaging the land which is forest-like, a fact also established by the Supreme Court appointed Central Empowered Committee. The TGIIC’s annual turnover is less than Rs150 crore and it raised thousands of crores through non-convertible debentures, a move that raises several red flags over the Corporation’s repayment abilities and disclosure norms, he said.
He also questioned the recent conversion of TGIIC from a private limited company to a public limited company, alleging that this structural change may have been carried out without full regulatory transparency or compliance with the Companies Act and Sebi guidelines.
Harish Rao further informed the Sebi chairman that merchant bankers who facilitated the fund raising through mortgage of the Kancha-Gachibowli land were paid over Rs 169 crore plus GST to structure these transactions, despite the questionable status of the land used as collateral.
“This issue concerns not only regulatory compliance, but also environmental responsibility and public interest,” he wrote, urging SEBI to investigate the entire chain of transactions and hold all parties accountable.
Urging Sebi to act without delay, Harish Rao said he attached all the relevant documents to support his argument, and sought an immediate probe. Silence on this matter, Harish Rao said, could set a dangerous precedent for the misuse of public assets.