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DSQ barred from accessing market

Our Bureau

MUMBAI, July 20

THE Securities & Exchange Board of India (SEBI) has issued punitive orders against the Chennai-based DSQ Software Ltd and its promoter and Managing Director, Mr Dinesh Dalmia, for various irregularities.

As per the SEBI order today, DSQ is prohibited from accessing capital market for one year and Mr Dalmia is also barred from dealing in securities for a period of one year.

SEBI has directed DSQ to cancel its acquisition of the US-based Fortuna Technologies through equity swap. SEBI has asked DSQ to cancel this deal, after following due procedure laid down under the Companies Act.

In its order, SEBI has said that it was of the prima facie opinion that conduct of the affairs of DSQ was likely to erode investors' confidence and integrity of the capital markets. SEBI has issued punitive orders against DSQ and Mr Dalmia, pending compl etion of investigations.

The SEBI investigations, so far, have revealed that the deal between DSQ and Fortuna ``was not genuine.'' SEBI has held that the deal relating to acquisition of Fortuna Technologies against swap of 1.4 crore DSQ shares, then valued at Rs 959 per share, w as not genuine.

SEBI's decision is based on various documents and contradicting versions given by Calcutta stock exchange member Biyani Securities and a Mauritius-based OCB (overseas corporate body), New Vision Investment Ltd.

DSQ entered into a deal with three Mauritius-based OCBs, Technology Trust, Softee Corporation and New Vision Investment, the shareholders of Fortuna, to acquire Fortuna through swap of DSQ shares.

SEBI has found various irregularities as the shares were issued to Delhi-based New Vision Investment Pvt Ltd instead of OCB New Vision Investment Ltd. DSQ was also guilty of non-disclosure of facts of acquisition in a timely and transparent manner to sto ck exchanges. SEBI suspects irregularity in valuation of Fortuna which ``agreed to take the shares of DSQ at the rate of Rs 685 per share when the market price was Rs 200.''