India: Ryan International School owners used dubious finance company to launder crores, says SEBI report

September 11, 2017

SEBI documents accessed by India Today show that Grace and Augustine Pinto, the trustees of the Ryan International group, made mysterious windfall gains after investing in a company that was found to have illegally manipulated stock market prices.According to Securities and Exchange Board of India (SEBI) documents seen by India Today, Grace and Augustine Pinto are were some of the investors who used a Mumbai-based Finance company, Kamalakshi Limited to allegedly launder over Rs 32 crore. The same company was later banned by SEBI from trading in the stock market for manipulating prices.

The modus operandi of the company was to allocate preferential shares (these are shares that cannot be traded on the stock market but are given only to certain “preferred” individuals) priced at Rs 10.20 to investors. Grace and Augustine Pinto bought 2.5 lakh shares each by investing over Rs 50 lakh. SEBI notes that in one year, from January 2014 to December 2014, the share price of this company rose artificially by a whopping 4694 per cent, from Rs 10.20 to over Rs 489. The Pintos thus used Rs 50 lakh to launder a neat Rs 32.20 crore in this one year. The investors then used another financial tool, the Long Term Capital Gains route to evade paying taxes which could be to the tune of 20 per cent. This was done by holding on to the shares for over a year. At the time of passing the order, SEBI noted that the entities were still holding the shares. Shares held for over a year does not invite a capital gain tax.