sebi:ISD/ADPL/AO/DRK-BM/EAD-3-393/59-2013
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Facts / Headnote
Penalty of Rs. 40,00,000 imposed on the noticee for failure to make disclosures under Regulation 8A(4) of the Takeover Regulations, 1997
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 199
- Reg. 31
- Reg. 201
- Reg. 8A(4)
- Reg. 8A
Parties
- Ankur Drugs and Pharma Limited
Holding
The noticee, Ankur Drugs and Pharma Limited, was held liable for failing to disclose the aggregate number of shares pledged/encumbered by its promoters to NSE during the quarters ending March 2010 to September 2011 as required under Regulation 8A(4) of the Takeover Regulations, 1997, and a penalty of Rs. 40,00,000 was imposed. The alleged violation of Regulation 31 of the Takeover Regulations, 2011 was held not maintainable against the noticee as the disclosure obligation under that regulation lies on the promoters, not the target company.
Full text
Page 2 of 9 imposed under Section 15A (b) of the SEBI Act for the alleged failure of the noticee to make disclosures under Regulation 8A (4) of the Takeover Regulations 1997 and Regulation 31 of the Takeover Regulations 2011. The SCN alleged that Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) conducted a joint investigation into the trading in the shares of the noticee during the period from May 3, 2010 to February 28, 2011 and submitted a joint investigation report to SEBI. It was observed from the joint investigation report that the promoters of the noticee had pledged/ encumbered some of their shares and the number of such shares pledged/ encumbered kept on changing during the quarters ending March 2010 to December 2011. It was observed that the number of shares pledged/ encumbered by the promoters during this period was in excess of 25,000 shares or 1% of the total share capital of the noticee and the number was changing due to creation of new pledge/ encumbrance and invocation of pledge/ encumbrance. However, no disclosure under Regulation 8A (4) of the Takeover Regulations, 1997 and Regulation 31 of the Takeover Regulations, 2011 was received from the noticee by NSE, where its shares are listed.
Page 3 of 9 b) The promoters lacked awareness of the Takeover Regulations and failed to make the disclosures. c) The shares were pledged for the purpose of raising funds for the noticee. As the promoters could not fulfill the repayment terms, the pledges were invoked without the consent of the promoters and they had no control over the same. d) The default did not result in any disproportionate gain to the promoters nor did cause loss to any investor. e) “The non compliance of the Section was not intentional but was a result of occurrence of such event in which the promoters have no control or say”. f) Since the noticee is facing acute financial shortage, the expert services of professionals could not be hired for complying with the requirements/ provisions of the Act.
Page 4 of 9 record. However, the said personal hearing was rescheduled to July 19, 2013 and was communicated to the noticee vide letter dated July 2, 2013. The said letter was served on the noticee and the proof of service is available on record. However, the noticee did not appear for the personal hearing scheduled on July 19, 2013 without providing any reason.
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Source: SecMarx — sebi:ISD/ADPL/AO/DRK-BM/EAD-3-393/59-2013. 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.