sebi:AO/SG-DP-VS/EAD/93/2018

SEBI · SEBI · 2013-06-04 · Suresh Gupta, Adjudicating Officer

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Facts / Headnote

Penalty imposed on the Noticee for violation of minimum public shareholding norms

Provisions invoked

• s. 21
• s. 23E
• s. 23
• s. 23J

Parties

• M/s Neycer India Limited

Holding

The Noticee violated Clause 40A of the Listing Agreement read with Rule 19A of SCR Rules read with Section 21 of the SCR Act by failing to comply with the minimum public shareholding requirement by June 03, 2013, and a consolidated penalty of Rs. 7,50,000 was imposed under Section 23E of the SCR Act.

Full text

Adjudication order in respect of M/s Neycer India Limited Page 2 of 16 3. Pursuant to order dated June 04, 2013, the Noticee made submissions before WTM. After duly considering the submissions made by of the Noticee, WTM passed an order on February 16, 2015 in respect of the Noticee. It was specified in the order dated February 16, 2015 that from the filings of the shareholding pattern of the Noticee for the quarters ended September 2013, December 2013, March 2014, June 2014, September 2014 and December 2014, it was seen that the Noticee was compliant with the minimum level of public shareholding norms only from the quarter ended September 2014. It was also specified in the order dated February 16, 2015 that September 25, 2014, can be taken as the date of compliance by the Noticee with the minimum level of public shareholding requirement.

Adjudication order in respect of M/s Neycer India Limited Page 3 of 16 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 7. A Show Cause Notice dated May 26, 2017 (hereinafter referred to as ‘SCN’) was issued to the Noticee under Rule 4(1) of the AO Rules, calling upon the Noticee to show cause as to why an inquiry should not be held against it in terms of Rule 4 of the AO Rules read with Section 23-I (1) and (2) of SCR Act and why penalty, if any, should not be imposed on it under section 23E of SCR Act for the aforesaid alleged violations.

Adjudication order in respect of M/s Neycer India Limited Page 4 of 16  This fact was also presented before the Hon'ble Whole time member ('WTM') in the submission and personal representation, however, in the order passed by the Hon'ble WTM dated 16 February 2015, the period of implementation was considered only as financial year 2010-11. In this regard, we submit that, the Hon'ble WTM has misconstrued the estimated period for rehabilitation and revival of the Company as period of implementation.  We have reproduced item 11 of the MRS which dealt with "Financial Viability" of the Company:  "11.1 The financial projections viz. statement of profitability, cash flow statements, projected Balance Sheets with assumptions. DSCR workings etc. are attached herewith. The Net Worth of the company is envisaged to turn positive by 2008-09 itself. The company's entire Accumulated Losses are however, expected to be completely wiped off during the period of rehabilitation ie by 2010-11... "  The period of rehabilitation originally allowed under the MRS was the financial year 2010-11, which however could not be met for reasons beyond the control of the Company. This was informed to BIFR and the Company was permitted to carry out revival activity under the MRS beyond 2010-11.  Here we wish to highlight that the period of rehabilitation is different from the period of implementation. The period of implementation commenced on 17 October 2008 when the MRS was sanctioned and is continuing ti

Source: SecMarx — sebi:AO/SG-DP-VS/EAD/93/2018. 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.