sebi:EAD-5/BS/AO/22/2017-18

SEBI · SEBI · 2016-07-19 · Biju S, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

No penalty imposed; matter disposed of as violations not established

Provisions invoked

• s. 15A
• s. 15
• s. 15I

Regulations

• Reg. 13(4)
• Reg. 13(5)
• Reg. 29(2)
• Reg. 29(3)

Parties

• Amarnath Gupta

Holding

The Adjudicating Officer found that the Noticee did not violate Regulation 29(2) and 29(3) of SAST Regulations, 2011 or Regulation 13(4) and 13(4A) read with Regulation 13(5) of PIT Regulations, 1992, and consequently no penalty was warranted.

Full text

Adjudication Order in the matter of Premier ExplosivesLtd Page 2 of 8 13,93,145 shares which constituted more than 5% of the share capital of PEL. Noticee acquired 2,14,000 equity shares constituting 2.41% of the share capital of PEL on July 12, 2014 pursuant to conversion of warrants into equity shares. As the said acquisition of shares was more than 2% of the share capital of PEL, Noticee was required to make requisite disclosure in this regard within two working days of the acquisition to PEL and the stock exchanges as stipulated under Regulation 29(2) read with Regulation 29(3) of SAST Regulations, 2011. However, no disclosures as stipulated under afore- mentioned Regulations were made by the Noticee. Therefore, the Noticee is alleged to have violated Regulation 29(2) read with Regulation 29(3) of SAST Regulations, 2011.

Adjudication Order in the matter of Premier ExplosivesLtd Page 3 of 8 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 5. A Show Cause Notice bearing ref. no. EAD-5/ADJ/SVKM/AA/OW/22808/1/2016 dated August 12 , 2016 (hereinafter referred to as 'SCN') was issued to the Noticee in terms of Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 read with Section 15I of SEBI Act, 1992 for the violations as specified in the SCN.

Adjudication Order in the matter of Premier ExplosivesLtd Page 4 of 8 “(2) Any person, who together with persons acting in concert with him, holds shares or voting rights entitling them to five per cent or more of the shares or voting rights in a target company, shall disclose the number of shares or voting rights held and change in shareholding or voting rights, even if such change results in shareholding falling below five per cent, if there has been change in such holdings from the last disclosure made under sub-regulation (1) or under this sub-regulation; and such change exceeds two per cent of total shareholding or voting rights in the target company, in such form as may be specified.” vi. As per the earlier regulation before 26.03.2013 (i.e. before amendment) every acquisition or disposal of shares representing two percent or more of the shares or voting rights in target company was required to be intimated. However, after amendment now the persons are required to intimate the change in shareholding only if such change in holdings from the last disclosure made exceeds two percent. In view of the amendment to regulation 29(2) of SAST Regulations, 2011, it is submitted that the present acquisition of shares by the Noticee does not fall under the purview of Regulation 29(2) of SAST Regulations, 2011 vii. It is further submitted that 88,000 shares were allotted to Amarnath Gupta (HUF) on 12.07.2014 and a declaration on 14.07.2014 and in turn the company has filed the same w

Source: SecMarx — sebi:EAD-5/BS/AO/22/2017-18. 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.