sebi:AO/SBM/EAD-3/1/2017
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Facts / Headnote
Violation established; penalty of Rs 3,00,000 imposed on Noticee
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 13(1)
- Reg. 29(1)
- Reg. 7(1)
- Reg. 29(3)
- Reg. 12
Parties
- Shree Ram Enterprises
Holding
The Noticee, Shree Ram Enterprises, violated Regulation 29(1) read with Regulation 29(3) of the SAST Regulations, 2011 and Regulation 13(1) of the PIT Regulations, 1992 by failing to disclose its acquisition crossing 5% in CFSL, and is liable to a monetary penalty of Rs 3,00,000 under Section 15A(b) of the SEBI Act, 1992.
Full text
Page 2 of 14 had failed to make timely disclosures pertaining to its acquisition of shares of the Company during the examination period. It was observed that the Noticee, which is a partnership firm had failed to comply with the disclosure requirements specified under the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as 'SAST Regulations') and also SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as 'PIT Regulations').
Page 3 of 14 4. In view of the fact that the Noticee’s shareholding in CFSL had crossed the threshold limit of 5% of the total paid up capital of the company, the Noticee was required to make necessary disclosures under the provisions of Regulation 29(1) read with Regulation 29(3) of the SAST Regulations to the Company and to BSE within two working days of its acquisition of the shares. Similarly, under the provisions of Regulation 13(1) of the PIT Regulations, the Noticee was required to make disclosures to the Company in the prescribed format (Form A) within two working days of its acquisition of the shares. It is alleged that the Noticee had failed to make these disclosures required under the aforementioned provisions of law. Therefore, adjudication proceedings were initiated against the Noticee in terms of the provisions of section 15 A(b) of the SEBI Act, 1992 (hereinafter referred to as ‘SEBI Act’) for the alleged violation.
Page 4 of 14 by the Noticee. Vide letter dated October 14, 2016, Noticee filed its reply to the SCN. The relevant excerpts of the reply submitted by the Noticee is mentioned hereunder: (i) We have made the dealings in the scrip of CFSL on BSE during the year period as stated in your goodself notice. (ii) Firstly, we like to mention that we never had any intention or view to acquire 5% or more of shares in CFSL. (iii) We like to mention that we are neither the promoters of the company nor have any connection with them. We have no other interests in the said company save and expect that dealing in its scrip on BSE. (iv) We futher like to mention that we are common persons dealing in stock market to make a gain or profit out of our investments and doesn't have knowledge about various guidelines / regulations of SEBI and not technically sound to understand the Nitti gritty of immense and wide guidelines and regulations. Thus, we are not aware of exact requirement or compliance responsibility cast on us through the provisions contained in SEBI (PIT) and SEBI (SAST) regulations. (v) That we most humbly request goodself to kindly take a lenient view in our matter being we are unaware of such stringent provisions and not any way connected with CFSL and belongs to general public category of investors and had no intention to make acquisition of more than 5% of shares of CFSL.
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Source: SecMarx — sebi:AO/SBM/EAD-3/1/2017. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.