sebi:EAD/KS/VB/AO/103-108/2017-18
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Facts / Headnote
Violations established; monetary penalties imposed on Noticees severally and jointly
Provisions invoked
- s. 15A
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
Regulations
- Reg. 3(1)
- Reg. 31(1)
- Reg. 31(2)
- Reg. 3
- Reg. 8A(2)
- Reg. 8A
- Reg. 31(3)
- Reg. 31
Parties
- Manmohan Sahu
- Indira Sahu
- Badrinarayan Mahapatra
- Pradeep Kumar Mahapatra
- Netrananda Sahu
- Chittaranjan Sahu
Holding
The Noticees violated Regulation 8A(2) of SAST, 1997, Regulation 31(1) and 31(2) read with 31(3) of SAST, 2011 by not disclosing pledge creation/invocation/release to the company, and violated Regulation 3(1) of SAST, 2011 by not making an open offer, and are liable for monetary penalty under Section 15A(b) and 15H(ii) of the SEBI Act.
Full text
Page 2 of 18 2. While examining the disclosure related violations in SAPL, it is observed that Dr V Ravichandran entered into an agreement for the purchase of real estate with Mr. Manmohan Sahu who was the Managing Director of SAPL and a Tri-party Escrow Agreement was executed on September 08, 2011, whereby Manmohan Sahu (Noticee- 1), Indira Sahu (Noticee-2), Badrinarayan Mohapatra (Noticee-3), Pradeep Kumar Mahapatra (Noticee-4), Netrananda Sahu (Noticee-5), Chittaranjan Sahu (Noticee-6), Promoters of SAPL (hereinafter collectively referred to as “Promoters / Noticees”) , Rupiya Paisa Fininvest Consultancy Pvt Ltd (Rupiya) and Mahanadhi Investment Advisory Services Pvt Ltd (Mahanadhi) pledged 1,45,00,409 shares as collateral into the account of Ms.V Vasantha Lakshmi who was acting in concert with Dr V Ravichandran. It is noted that the Noticees while undertaking the aforesaid transaction had violated the provisions of Regulation 8A(2) of SAST, 1997, Regulation 3(1) of the SAST,2011 and Regulation 31(1), Regulation 31(2) read with Regulation 31(3) of the SAST,2011.
Page 3 of 18 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 4. A Show Cause Notice (hereinafter referred to as ‘SCN’) dated December 29, 2017 was issued to the Noticees under Rule 4 of the Adjudication Rules communicating the alleged violations of certain provisions of SAST, 1997 and SAST, 2011. The Noticees were also called upon to show cause as to why an inquiry should not be initiated against them in terms of Rule 4 of the Adjudication Rules and penalty be not imposed under Section 15A(b) and 15H(ii) of the SEBI Act for the alleged contravention of SAST, 1997 and SAST, 2011.
Page 4 of 18 Thereafter, Manmohan Sahu failed to honor the terms and conditions of the Agreement dated September 8, 2011. Pursuant to this, Ms. Vasantha Lakshmi acting as PAC with Dr. Ravichandran invoked 8160000 pledged shares belonging to promoters e) Further, out of 1,45,00,409 shares pledged with Ms. Vasantha Lakshmi acting as PAC with Dr. Ravichandran, 56,52,174 shares were under lock-in until February 09, 2013. On February 14 and 15, 2013 after the lock-in period had expired, 56,75,794 shares were also invoked out of which 11,95,409 shares were belonging to Chittaranjan Sahu, one of the Noticees. The above invocation of pledge required disclosure by the Noticees under Regulation 31(2) read with Regulation 31(3) of SAST, 2011 f) It was also alleged that on March 28, 2013, 1,21,00,409 shares invoked by Ms. V Vasanthalakshmi acting as PAC with Dr. Ravichandran were returned to the promoters and other investors after Manmohan Sahu repaid the entire dues and was discharged from the liabilities. Out of the total 1,21,00,409 shares returned, 69,55,409 shares (27.34% of the total share capital) were belonging to promoters. Pursuant to such acquisition of shares, the shareholding of promoters in the company crossed 25% and were required to make public announcement for open offer under Regulation 3(1) of SAST, 2011. However, it is alleged that Noticees had failed to make public announcement in accordance with Regulation 3(1) of the SAST, 2011.
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Source: SecMarx — sebi:EAD/KS/VB/AO/103-108/2017-18. 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.