sebi:EAD/SR/SJ/AO/41-50/2017-18

SEBI · SEBI · 2017-07-10 · Sangeeta Rathod, Adjudicating Officer

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Facts / Headnote

Violation established; joint and several penalty imposed

Provisions invoked

• s. 11
• s. 15
• s. 15H
• s. 15J
• s. 2(1)
• s. 23

Regulations

• Reg. 3
• Reg. 10
• Reg. 44
• Reg. 3(3)
• Reg. 8(3)
• Reg. 3(1)
• Reg. 3(2)
• Reg. 32

Parties

• Ms. Sangita Sethi
• Ms. Soniya Sethi
• Sanjay B Sethi HUF
• Mr. Sudhir Sethi

Holding

The Noticees violated Regulation 3(1) read with Regulation 3(3) of SEBI (SAST) Regulations, 2011 by acquiring 93,600 shares on May 17, 2013 taking promoter holding from 23.24% to 25.09% without prior public announcement of open offer, and are jointly and severally liable to penalty of Rs. 25,00,000 under Section 15H(ii) of the SEBI Act.

Full text

Adjudication Order against ten entities in the matter of Beryl Securities Limited Page 2 of 15 2. OD of SEBI observed from the shareholding pattern for quarters ending June 2013 and September 2013 available on the website of BSE that the shareholding of Noticees (promoter group) increased from 23.24% to 25.09% of the share capital of the Target Company and the Noticees did not made any public announcement for open offer for acquisition of shares, as mandated under Regulation 3(1) read with Regulation 3(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as ‘SEBI (SAST) Regulations’). In view of this, OD of SEBI initiated adjudication proceedings and the said proceedings has been approved by the Competent Authority.

Adjudication Order against ten entities in the matter of Beryl Securities Limited Page 3 of 15 Company for the quarter ending September 2013. The shareholding of the promoter group thus exceeded the threshold limit of 25% stipulated in Regulation 3(1) of SEBI (SAST) Regulations. The said increase of 1.85% in shareholding of the Noticees was on account of acquisition of 93,600 shares of BSL by certain Noticees on May 17,

Adjudication Order against ten entities in the matter of Beryl Securities Limited Page 4 of 15 till 2012. In view of this, the promoters of the Target Company were holding more than 25% share capital of the Target Company throughout including quarters ending June, September and December 2013. Thus, the promoters along with PACs were holding 18,55,900 shares representing 36.63% of the share capital of the Target Company and after acquisition of 93,600 shares on May 17, 2013, the promoters shareholding increase to 19,49,400 shares representing 38.48% of the share capital of the Target Company. d) Thus, from the inception of the Target Company, the promoters including BDL were holding more than 25% paid up capital of the Target Company and therefore acquisition of 93,600 shares of the Target Company on May 17, 2013 did not trigger open offer obligation under Regulation 3 of SEBI (SAST) Regulations. Since, there is no violation, the present adjudication proceedings may be dropped. No penalty can be imposed as there is no violation. e) It was further submitted that due to some wrong interpretation and or advise, without considering the shareholding of BDL, the Noticees submitted reply dated September 08, 2015 and only dealt with increase of shareholding for less than 5% and there is no violation of Regulation 3(2) of SEBI (SAST) Regulations.

Source: SecMarx — sebi:EAD/SR/SJ/AO/41-50/2017-18. 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.