sebi:EAD-8/JS/SP/69/2018

SEBI · SEBI · 2017-10-04 · Jeevan Sonparote, 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

Violations established; monetary penalty of Rs. 10,00,000 imposed under Section 15A(b) of SEBI Act, 1992

Provisions invoked

• s. 15A
• s. 15
• s. 15J

Regulations

• Reg. 7
• Reg. 7(1)
• Reg. 11
• Reg. 13(1)
• Reg. 13(6)
• Reg. 7(2)
• Reg. 8(1)
• Reg. 30
• Reg. 3(2)
• Reg. 01
• Reg. 05

Parties

• Scandent Holding Mauritius Ltd.

Holding

Scandent Holding Mauritius Ltd. violated Regulations 7(1) and 7(1A) read with 7(2) of the Takeover Regulations, 1997 and Regulation 13(1) of the PIT Regulations, 1992 by delayed disclosures for the December 28, 2005 and June 29, 2006 allotments, and is liable to a monetary penalty of Rs. 10,00,000 under Section 15A(b) of the SEBI Act.

Full text

Adjudication Order in the matter of Xchanging Solutions Ltd. - Noticee Scandent Holding Mauritius Ltd. Page 2 of 15 continued thereafter, after including the alleged violations of PIT Regulations.

Adjudication Order in the matter of Xchanging Solutions Ltd. - Noticee Scandent Holding Mauritius Ltd. Page 3 of 15 Mauritius Ltd. to form the surviving entity, Scandent Holding Mauritius ltd.) On December 28, 2005, Target Company made a filing with NSE regarding allotment of the shares to Scandent Group Ltd. b. Prior to the preferential allotment of shares, Scandent Group Ltd. held 41.78% of the paid up equity share capital of the Target Company and post allotment of the 10,25,227 shares, the shareholding of Scandent Group increased to 43.76%. While the gross acquisition of shares which were allotted was 3.40% the net change in shareholding of Scandent Group Ltd. was only 1.98% viz less than 2% of the paid up share capital. c. Since the net acquisition of equity shares of Scandent Group ltd. was less than 2%, in other words, the difference between the post allotment and pre allotment voting rights was merely 1.98%, the disclosure requirement under Regulation 7(1A) of the Takeover Regulations shall not apply. d. Without prejudice to the above, Scandent made a filing under Regulation 7(1A) of the Takeover Regulations on October 14, 2008. e. Further, pursuant to the quarterly shareholding pattern disclosed by the Target Company to the stock exchanges, for the quarter ending December 31, 2005, the shareholding of Scandent Group Ltd. was disclosed as 43.76% of the share capital of the Target company. For June 29, 2006 transaction f. On June 29, 2006, pursuant to the Scheme of mer

Adjudication Order in the matter of Xchanging Solutions Ltd. - Noticee Scandent Holding Mauritius Ltd. Page 4 of 15 provisions of the Act or where the breach flows from the bona fide belief that the offender is not liable to act in the manner prescribed by the statute.” k. The above mentioned principles laid down by the Supreme Court in were applied by the SAT in Cabot International Capital v Adjudicating Officer Appeal No. 24/2000, where the SAT observed: “it is to be seen whether the facts of the case warranted a penalty…the facts to be

Source: SecMarx — sebi:EAD-8/JS/SP/69/2018. 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.