sebi:ASK/RGA/AO/13/2014

SEBI · SEBI · 2013-08-13 · A. Sunil Kumar, Adjudicating Officer

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Facts / Headnote

Violation found; total monetary penalty of Rs 5,00,000 imposed

Provisions invoked

• s. 15A
• s. 15
• s. 3(4)
• s. 15J

Regulations

• Reg. 3
• Reg. 199
• Reg. 10
• Reg. 3(3)
• Reg. 3(4)
• Reg. 3(1)(e)

Parties

• Coplama Products Pvt. Ltd.

Holding

The Noticee, Coplama Products Pvt. Ltd., was held to have violated regulations 3(3) and 3(4) of SAST Regulations, 1997 for delayed disclosure and reporting of its April 1, 2005 inter-se acquisition. A total monetary penalty of Rs 5,00,000 (Rs 2,50,000 under section 15A(b) and Rs 2,50,000 under section 15A(a) of the SEBI Act) was imposed.

Full text

Adjudication order in the matter of Continental Profiles Ltd. Page 2 of 13 January 30 , 2014 2. Securities and Exchange Board of India (hereinafter referred to as “SEBI”) examined the letter of offer pertaining to the aforesaid open offer and alleged that one of the promoters of CPL, i.e. Coplama Products Pvt. Ltd. (hereinafter referred to as "Noticee") had violated regulations 3(3) and 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as “SAST Regulations, 1997”).

Adjudication order in the matter of Continental Profiles Ltd. Page 3 of 13 January 30 , 2014 6. Vide letter dated December 12, 2013, Noticee filed a reply to the SCN. In the interest of natural justice and in order to conduct an inquiry in terms of rule 4(3) of the Rules, the Noticee was granted an opportunity of personal hearing on January 07, 2014 vide notice dated December 19, 2013. Mr. R.S. Jhawar, appeared as Authorized Representative (AR) on behalf of the Noticee and reiterated the submissions made vide letter dated December 12, 2013. During the course of hearing, Noticee also submitted additional written submissions dated January 04, 2014 and requested to take a lenient view. The salient points of

Adjudication order in the matter of Continental Profiles Ltd. Page 4 of 13 January 30 , 2014 regulatory authorities. Immediately after being informed about the violation, had belatedly submitted the required compliance papers and the compliance status was reported by the Manger to the Offer with the SEBI.  It is a small company having a paid –up capital of ` one lakh only, could not afford to keep a qualified person to look after this specific job.  The price paid by the Acquirer of ` 14 /- per share to the public shareholders is much higher than the Share Purchase Agreement price of ` 8 /-per share. The Acquirer has duly taken care of interest of the existing shareholders of the company by offering them a very attractive exit price to the shareholders.  Non-compliance of regulations 3(3) and 3(4) within the stipulated time frame from the date of inter-se transfer of shares resulted into the violations of the provisions of Erstwhile SEBI Regulations, 1997. The Acquirer has duly taken note of that and the offer price of ` 14/- was arrived after taking into consideration the fair price as on the date of acquisition assuming the same to be triggered date i.e. 01.04.2005 along with the interest element of 10% p.a. from the triggered date, till the actual date of current Public Announcement i.e. 08.04.2013.  Delayed intimation is purely technical in nature and without any malafide. The delayed intimation is neither deliberate nor willful, but has occurred inadvertently and to

Source: SecMarx — sebi:ASK/RGA/AO/13/2014. 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.