sebi:BM/AO-123/2011
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Facts / Headnote
Allegations of violation of Regulation 7(3) of SAST and Regulation 13(6) of PIT not established; violation of Section 21 of SCRA established; penalty of Rs. 1,00,000 imposed under Section 23A read with 23E of SCRA.
Provisions invoked
- s. 15A
- s. 15
- s. 21
- s. 3(1)
- s. 12
- s. 15J
- s. 23A
- s. 23
- s. 23E
Regulations
- Reg. 7
- Reg. 13
- Reg. 13(3)
- Reg. 8
- Reg. 7(3)
- Reg. 13(6)
- Reg. 7(1)
- Reg. 8A(4)
Parties
- MTZ Polyfilms Limited
Holding
The Noticee did not violate Regulation 7(3) of SAST or Regulation 13(6) of PIT as the disclosure obligation arises only upon receipt of information from the concerned entities, which was not received. However, the Noticee violated Section 21 of SCRA by failing to comply with listing agreement clauses, attracting a penalty of Rs. 1,00,000 under Section 23A read with 23E of SCRA.
Full text
_____________________________________________________________________________________ MTZ Polyfilms Limited in the matter of MTZ Polyfilms Limited Page 2 of 13 transferred 56,25,000 shares of the company on 10.07.2009, 04.08.2009 and 17.09.2009 in off‐market to Mr. Sanjay Bajranglal Sharma. It was further observed that Mr. Bajranglal Sharma then transferred 56,25,000 shares off‐market to MTZ Industries Limited on 13.07.2010, 13.08.2010, 08.09.2010, 14.09.2010. It was observed that due to such transfers there was change in the holding of Mr. Sanjay Bajranglal Sharma by more than 5% of the paid up capital of the company and 14% in case of MTZ Industries Limited and such changes required disclosures to the exchange under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997(hereinafter referred to as ‘SAST Regulations’) and SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as ‘PIT Regulations’). It was alleged that the Noticee did not make the disclosures to the exchange under Regulation 7(3) of SAST and Regulation 13(6) of PIT.
_____________________________________________________________________________________ MTZ Polyfilms Limited in the matter of MTZ Polyfilms Limited Page 3 of 13 referred to as ‘Rules’) to inquire into and adjudge the alleged violations of SAST Regulations, PIT Regulations and SCRA Act.
_____________________________________________________________________________________ MTZ Polyfilms Limited in the matter of MTZ Polyfilms Limited Page 4 of 13 e. That though the shares were transferred and registered in the name of the lender, the right, title and interest in the shares are not transferred and MTZ Industries Limited continue to be the owner of the said shares. Further, while transferring the shares, the lender has given no declaration or intimation to the company and therefore the company could not do anything. f. That in case of repayment of loan the same shares were returned back to the MTZ Industries and the position was thus neutralized and restore. g. That since the alleged Acquirer i.e. Pledgee or the shareholder (MTZ Industries Limited) in the instant case, have not provided the information as required under sub‐ regulations(1) and or (1A) r/w explanation thereto of Regulation 7 of SAST, in our humble opinion the Company cannot be held liable to disclose the information as required under Regulation 7(3) of SAST. h. That without prejudice to what is stated above, in our humble opinion the company cannot be held liable to disclose the information as required under Regulation 8A(4) of SAST since it has not received the disclosure required under Regulation 8 A(2) & (3) of the SAST. i. That due to cripple working condition
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Source: SecMarx — sebi:BM/AO-123/2011. 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.