sebi:DSR/AO-40/2008
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Facts / Headnote
Monetary penalty imposed on the noticee for violations of Regulation 7(1) of SAST Regulations, 1997 and Regulation 13(1) & 13(3) of Insider Trading Regulations, 1992
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 7
- Reg. 7(1)
- Reg. 13(3)
- Reg. 13(1)
Parties
- Hanuman Securities Private Limited
Holding
The noticee, Hanuman Securities Private Limited, was found to have violated Regulation 7(1) of SAST Regulations, Regulation 13(1) and 13(3) of Insider Trading Regulations by failing to disclose its acquisition of more than 5% shareholding and subsequent sale of 6.87% of NBL shares, and a monetary penalty was imposed under Section 15A(b) of the SEBI Act, 1992.
Full text
Page 2 of 7 December 11, 2008 but the noticee failed to avail the same. I proceed to deal with the matter since the reply of the noticee is already available on record.
Page 3 of 7 8. The noticee submitted that these sales were on account of an order of Moratorium in respect of NBL issued by the Government of India on an application made by the Reserve Bank of India (hereinafter referred as “RBI”). In the said order, a scheme of amalgamation of NBL with Punjab National Bank (hereinafter referred as “PNB”) was set out and the said scheme provided for transfer of assets and liabilities of NBL to PNB. It was clearly set out that the entire amount of the paid up capital and reserves of NBL were to be treated as provision of bad and doubtful debts and depreciation in the assets of NBL. The scheme made no provision for issue of shares of PNB in lieu of the shares of NBL to the shareholders of NBL. Therefore, in order to avoid a complete loss of its investment in the shares of NBL, the noticee sold the shares.
Page 4 of 7 “… the object of Regulation 7 is to inform the investors that an individual has acquired 5 per cent shares in the company concerned. If the acquisition has been made by more than one individual in association with each other, it is also obligatory on the part of such individuals to disclose their identity. This can only be done when the information is given to the company. If after the company has received the information, its officer do not read the information and in consequence thereof no information is given to the investors through the concerned Stock Exchanges, the company is to be blamed but unless the company receives the information , the question of the officers of the company reading the information and then transmitting such information to the investors through the Stock Exchanges concerned does not, nor can at all arise. Therefore, it is obligatory on the part of the person so acquiring to inform the company…”.
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Source: SecMarx — sebi:DSR/AO-40/2008. 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.