sebi:AO/SBM/EAD-3/84/2017

SEBI · SEBI · 2013-03-11 · Suresh B Menon, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Penalty imposed on the Noticee for failure to make required disclosures under SAST and PIT Regulations

Provisions invoked

• s. 15A
• s. 15
• s. 15J

Regulations

• Reg. 13
• Reg. 13(1)
• Reg. 13(3)
• Reg. 29(1)
• Reg. 7(1)
• Reg. 13(5)
• Reg. 29(3)
• Reg. 12
• Reg. 29

Parties

• Ms. Neha Narendra Shah

Holding

The Noticee violated Regulation 29(1) and 29(2) read with Regulation 29(3) of the SAST Regulations, 2011 and Regulations 13(1), 13(2A), 13(3) and 13(4A) of the PIT Regulations, 1992 by failing to make timely disclosures of her shareholding changes in NITSL. A total penalty of Rs 3,00,000/- was imposed under Section 15A(b) of the SEBI Act, 1992.

Full text

Page 2 of 15 the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as 'SAST Regulations') and also under the provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as 'PIT Regulations'). In view of the above, adjudication proceedings were initiated against the Noticee under the provisions of section 15 A (b) of the SEBI Act, 1992 ( hereinafter referred to as ‘SEBI Act’).

Page 3 of 15 alleged contravention of the provisions of law by the Noticee. The SCN issued to the Noticee inter alia mentioned the following : a) SEBI conducted an investigation into the alleged irregularity in the trading in the scrip of Nivyah Infrastructure & Telecom Services Ltd ( Nivyah) to examine the possible violation of the provisions of the SEBI Act and various rules and regulations made there under. The shares of Nivyah were listed at Bombay Stock Exchange Ltd. and Madhya Pradesh Stock Exchange Ltd. b) The details of transactions of the Noticee in the scrip of Nivyah are given as follows: Date of acquisition Acqi/ sale No. of shares Change in shareholding Result ant % Chang e in % Net change in shareholding 20.06.2012 Acqui 58,46,000 7.85%

Page 4 of 15 c) It is alleged that on June 20, 2012, Notioee had acquired 58,46,000 shares of Nivyah which constitutes 7.85 % of the of the total shareholding of Nivyah. At this juncture, in terms of regulation 29(1) read with 29(3) of SAST Regulations, as the Noticee had acquired more than five percent shares of the target company i.e Nivyah, the Noticee was required to disclose such acquisition of shares beyond the threshold limit of 5% to the stock exchanges and to Nivyah within two working days of such acquisition of shares. d) The Noticee was part of the promoter/promoter group of Nivyah during the relevant period. As can be seen from the table above, Noticee, on various dates, purchased and sold more than 25,000 shares of Nivyah. During the period when the Noticee had bought and sold shares which was more than 25,000 shares, as per regulation 13(4A) read with 13(5) of PIT Regulations, as Noticee bought and sold more than 25,000 shares, she was required required to disclose such change in her shareholding to the company and to the stock exchanges within two working days of acquisition /sale of such shares. e) On August 14, 2012, Noticee sold 25,00,000 shares of Nivyah which led to a change in her shareholding and the change exceeding more than 2% of the total shareholding in the Company. At this juncture, as per regulation 13(1) and 13(3) read with 13(5) of PIT Regulations, Noticee was required to disclose such change in her shareholding to the company within two working

Source: SecMarx — sebi:AO/SBM/EAD-3/84/2017. 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.