sebi:ASK/AO-92/2014-15

SEBI · SEBI · 2000-03-01 · A. Sunil Kumar, Adjudicating Officer

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Facts / Headnote

Violation of regulation 10 of SAST Regulations, 1997 held established and penalty of Rs. 2,00,000 imposed under section 15H(ii); violation of regulation 12 held not established

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Regulations

• Reg. 6
• Reg. 3
• Reg. 199
• Reg. 10
• Reg. 12
• Reg. 20
• Reg. 35
• Reg. 3(1)(e)

Parties

• M Apte Kantilal Pvt. Ltd.

Holding

The Noticee violated regulation 10 of SAST Regulations, 1997 by acquiring 3,19,110 (16.34%) shares of AAL on March 01, 2000 without making a public announcement, but did not violate regulation 12 as there was no change in control, and is liable to a penalty of Rs. 2,00,000 under section 15H(ii) of SEBI Act.

Full text

Adjudication Order in respect of M Apte Kantilal Pvt. Ltd. Page 2 of 13 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) examined the draft Letter of Offer filed pursuant to the afore-mentioned public announcement and observed that M Apte Kantilal Pvt. Ltd. (hereinafter referred to as "Noticee") acquired 3,19,110 (16.34%) shares of AAL on March 01, 2000 from Mr. Vaman Madhav Apte resulting into increase in the shareholding of the noticee in AAL from 0.00% to 16.34%. As this acquisition entitled the Noticee to exercise 15% or more of the voting rights of AAL, it was required to make a public announcement as stipulated under regulation 10 of the SAST Regulations, 1997. However, no public announcement as stipulated under the aforesaid regulations was made by the Noticee. It was further observed that the afore-mentioned transaction dated March 01, 2000 also resulted in the Noticee acquiring control over AAL along with other promoters of AAL and as a consequence the Noticee was required to make public announcement as stipulated under regulation 12 of the SAST Regulations, 1997. However, no public announcement as stipulated under the aforesaid regulation was made by the Noticee.

Adjudication Order in respect of M Apte Kantilal Pvt. Ltd. Page 3 of 13 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 4. Show Cause Notice no. EAD-5/ADJ/ASK/AA/OW/12841/2014 dated May 06, 2014 (hereinafter referred to as “SCN”) was issued to the Noticee under rule 4 of the Rules to show cause as to why an inquiry should not be initiated and penalty be not imposed under section 15H(ii) of the SEBI Act for the alleged violation specified in the SCN. It was alleged in the SCN the Noticee has violated the provisions of regulations 10 and 12 of the SAST Regulations, 1997 read with Regulation 35 of the SAST Regulations, 2011. The copies of the documents relied upon in the SCN were provided to the Noticee along with the SCN.

Adjudication Order in respect of M Apte Kantilal Pvt. Ltd. Page 4 of 13 to the order passed by Hon'ble SAT in the matter of Ashok K Chaudhary vs. SEBI and Libord Finance Ltd. vs SEBI.  We are closely held private company incorporated in the year 1948 and our promoters since inception have been Apte and Himatlal Kantilal family who together hold 100% shareholding of the company. We belong to Apte Group consisting of Mr. Vaman Madhav Apte, Mrs. Shetta Madhav Apte, Mr. Arvind Laxman Apte and Mr. Madhav Laxman Apte.  At the relevant time (i.e. March 2000) Mr. Vaman Madhav Apte, Mrs. Shetta Madhav Apte, Mr. Arvind Laxman Apte and Mr. Madhav Laxman Apte were the promoters of AAL and the promoter group was holding 59.10% shares in the Target Company.  In so far as we are concerned during March 2000, Mr. Vaman Madhav Apte along with family members were our promoters and were together holding 70% shares. Even today Mr. Vaman Madhav Apte along with family members continues to be our promoters.  In March 2000, Mr. Vaman Madhav Apte (One of the promoters of AAL who was holding in his individual name around 24.43% shares of AAL), had by way of inter se transfer of shares, transferred 16.34% shares to us for operational convenience. Post the said transfer, total shareholding of the Promoter group continued to remain 59.10% i.e. there was no disturbance in the promoter shareholding of AAL. There was no increase or decrease in the shareholding or control of Mr. Vaman Madhav Apte as a res

Source: SecMarx — sebi:ASK/AO-92/2014-15. 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.