The plan was to pack this refinery and transport it to India. In 2007, Cals said BayernOil sold a 30-year-old refinery plant at Ingolstadt in Germany to Lohrmann International, which in turn sold it to Cals. The company had hired UK refinery engineers KBC to upgrade the plant, adding new units so they could also refine lower-quality Arab crude oil. The story sold by the Cals management to the market was that they would ‘dismantle and import’ a refinery plant in 3,000 containers from Germany to Haldia, where it would be put back together again. The stock churned average daily volumes of over 40 million shares, as Indian investors were swayed by the company’s plan to build a $1.1-billion refinery at Haldia, West Bengal, that was supposed to be operational by March 2011. Aggressively traded counterīetween 20, Cals Refineries, which was then priced at around Rs 0.30-Rs 0.40, was an aggressively traded counter in India’s stock market, which turned out to be offloading of stake by promoters. SEBI was also investigating a few infamous stock market operators for trading in the Cals Refineries stock. SEBI had concluded that GDR issuance to certain overseas investors was a sham transaction undertaken mainly to attract Indian investors, who were sold Cals shares in India. SAT further observed that Rastogi sold a part of these GDRs, 2.8 million, and received $8.96 million in November 2011. SAT has observed that 25 million GDRs worth $92 million, issued by Cals, had come to rest in the Asia Texx account, which were further transferred free-of-cost to Rastogi.
The UK case also draws reference to a recent order by the Securities and Appellate Tribunal (SAT) in India, which upheld a SEBI order against Cals Refineries for GDR scam and asked one of the promoters of the company, Gagan Rastogi, and Cals to pay $92 million with 6 per cent interest on the amount from 2009, for de-defrauding Indian investors.
Hedge fund RP Explorer has claimed damages from Sanjay Malhotra, the promoter of Cals Refineries, currently lodged in a Dubai prison, for “conspiracy and deceit,” arising out of the hedge fund’s 2007 purchase of securities issued by the Indian company, a report by Bonnie Eslinger of news portal Law360 revealed. Strap: In July SAT, too, had ordered a Cals promoter to retun $92 million with 10 years’ interestĬals Refineries, India’s largest traded penny stock at one point, is now part of a $70-million litigation in the UK.
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