Governance: RANA SUGARS How they duped the investors

THE GDR (global depository receipt) scam, which was perpetrated by dozens of companies between 2002 and 2014, was as simple as it gets. Float a GDR issue—the amount raised is meaningless and can be a few million dollars. It is better if the GDR is listed in a not-so-prominent exchange like the Dubai International Financial Exchange. Before the issue, ink a deal with a single buyer to purchase all the GDRs. Arrange for a bank in a slightly shadowy nation to issue a loan to the buyer.

Through a board resolution by GDR-issuer, assure the bank that the entire proceeds will be deposited as security with it until the loan is repaid. As payments are made to the bank in instalments, it releases the amounts to the issuer...

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