Date:09/09/2006 URL: http://www.thehindu.com/2006/09/09/stories/2006090905461500.htm

Business

Rs. 1 cr. fine imposed on Goldman Sachs

Special Correspondent

MUMBAI: The Securities and Exchange Board of India (SEBI) on Friday imposed a penalty of Rs. 1 crore on Goldman Sachs Investment (Mauritius) Ltd (GSIML) under Sec. 15HB of the SEBI Act, 1992, for violating norms connected to Participatory Notes (PNs), an offshore derivative instrument (ODI).

Maximum penalty

"It prima-facie appeared that Goldman Sachs International Ltd (GSIL), an affiliate of GSIML, a sub-account registered with SEBI, issued off-shore derivatives instruments to an overseas corporate body (OCB), Magnus Capital Corporation Ltd (MCCL), a Mauritius based entity, and, thereby, violated the declaration furnished in the fortnightly statement on the issue of ODIs submitted to SEBI as on August 15, 2003".

In its order the Adjudicating Officer noted that "This is required to ensure that law of the land, especially when the efficacy of Indian securities market is at stake, is enforced to the maximum and a message is given to the other market players that they need to be cautious in their dealings in the securities market.

In view of the seriousness of the violation, I am satisfied that it is a fit case for imposition of the maximum penalty as prescribed under 15HB of the SEBI Act, 1992.''