sebi:ISD/OCL/AO/DRK-AKS/EAD-3/360/26-13
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Facts / Headnote
Penalty imposed on the noticee for violation of Regulation 8A(2) of the Takeover Regulations, 1997
Provisions invoked
- s. 15A
- s. 15
- s. 12
- s. 15J
- s. 58(2)
Regulations
- Reg. 199
- Reg. 31
- Reg. 8A
- Reg. 58
Parties
- Alacrity Securities Ltd.
Holding
The noticee, Alacrity Securities Ltd., violated Regulation 8A(2) of the Takeover Regulations, 1997 by failing to disclose 50,000 pledged shares on 18.08.2011 and 27,000 pledged shares on 20.09.2011, and a penalty of Rs. 3,00,000 was imposed under Section 15A(b) of the SEBI Act. Regulations 31(1) read with 31(3) of Takeover Regulations, 2011 were held not applicable as they came into force after the pledging occurred.
Full text
Page 2 of 10 Act’) to inquire into and adjudge under Section 15A (b) of the SEBI Act the violation of Regulation 8A (2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as ‘Takeover Regulations’) and Regulations 31 (1) read with 31 (3) of Takeover Regulations, 2011 alleged to have been committed by the noticee.
Page 3 of 10 6. Vide hearing notice dated 01.04.2013, noticee was granted an opportunity of hearing on 10.04.2013 at SEBI Bhavan, Mumbai. In response to the same, noticee vide its letter dated 04.04.2013 authorized Shri Kishore V Shah, Director of Alacrity Securities Ltd. and Shri Manoj Kumar Singhal, Chartered Accountant (hereinafter referred to as ‘ARs’) to attend the scheduled hearing. The ARs at the time of hearing reiterated the
Page 4 of 10 stock exchange and to the company under Takeover Regulations 1997 and 2011. 9. The noticee has submitted that in order to meet the Pay in / margin obligation of its client, J.P. Tradecom Pvt. Ltd. the noticee had pledged the shares on behalf of the client. However, the investigation report (hereinafter referred to as ‘IR’) after perusal of Section 12 of Depositories Act, 1996 (hereinafter referred to as ‘DP Act’) and Regulation 58 (1) of SEBI (Depositories and Participants) Regulations, 1996 (hereinafter referred to as ‘DP Regulations’) observes that only a beneficial owner can pledge the securities owned by him. In the present matter, the client transferred the shares for collateral purpose to the stock broker’s Client Beneficiary Account and then the noticee moved the shares to its own Beneficiary Account. From the noticee’s own Beneficiary Account, the noticee pledged the shares. Therefore, the noticee ought to have made disclosure under Takeover Regulations.
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Source: SecMarx — sebi:ISD/OCL/AO/DRK-AKS/EAD-3/360/26-13. 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.