sebi:Order/AK/GN/2025-26/32075

SEBI · SEBI · 2025-01-27 · Amit Kapoor, 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

Penalty imposed on Noticee for violations of Takeover Regulations

Provisions invoked

• s. 15A
• s. 15
• s. 15J
• s. 176

Regulations

• Reg. 7
• Reg. 4
• Reg. 17
• Reg. 29
• Reg. 31
• Reg. 29(2)
• Reg. 18
• Reg. 19
• Reg. 31(1)
• Reg. 31(2)
• Reg. 79(3)

Parties

• Cyquator Media Services Private Limited

Holding

The Noticee violated Regulation 31(1) r/w 31(3), Regulation 31(2) r/w 31(3), and Regulation 29(2) of the Takeover Regulations by failing to disclose creation and invocation of encumbrance and by making an incorrect disclosure, and a penalty of Rs. 4,00,000 was imposed under Section 15A(b) of the SEBI Act.

Full text

Adjudication Order in the matter of Cyquator Media Services Private Limited Page 2 of 20 as to why an inquiry should not be initiated against it and why penalty, if any, should not be imposed upon it u/s 15A(b) of SEBI Act for the alleged violations.

Adjudication Order in the matter of Cyquator Media Services Private Limited Page 3 of 20 hearing was provided to Noticee on December 08, 2025. Vide email dated December 06, 2025, Noticee submitted its reply. The same is summarized below- 7.1. The Noticee is a promoter of Zee Entertainment Enterprises Ltd. (ZEEL"). The Noticee entered into a Pledge Agreement with Indiabulls Housing Finance Limited dated December 14, 2016 and only agreed to pledge 60,50,000 shares of ZEEL ("Pledge Agreement"). Since, the regulatory procedure to create a pledge having not been followed and in the absence of the Pledge Master Report being generated, the pledge was not created as it was agreed in the Pledge Agreement. 7.2. The SCN alleges that a pledge came into existence vide said Pledge Agreement and thereafter the said pledge came to be invoked vide notice dated November 14, 2018 issued by Indiabulls Housing Finance Limited. However, the factual position is that the said notice dated November 14, 2018 was not addressed to the Noticee and it did not mention anything about pledge of shares or ZEEL shares. There is no mention of invocation of shares in the demat statement and thus, there could not be any possibility of invocation of the pledged shares as pledge did not exist at first place. Thus, no disclosures were warranted. 7.3. On January 28, 2019, as per the Transaction Statements shared by SEBI, 52,94,000 shares of ZEEL were transferred to Indiabulls Ventures Limited (which is a separate leg

Adjudication Order in the matter of Cyquator Media Services Private Limited Page 4 of 20 7.5. Noticee submitted that SEBI, in a letter dated August 17, 2010 (MRD/DoP/MAS- OW/1623/2010) addressed to the depositories, has expressly stated that the procedure for creating a pledge prescribed under the Depositories Act and Depositories Regulations must be strictly adhered to ("SEBI Letter"). It opined that any transaction contrary to the prescribed process would not be treated as a pledge and directed the depositories to issue a suitable communique to beneficial owners, following which NSDL issued a circular dated September 6, 2010 (NSDL Circular") enclosing the SEBI Letter. 7.6. This has been reiterated in the NSDL Circular SEBI issued a Master Circular dated December 15, 2016 (Ref: SEBI/HO/MRD/DP/) (Master Circular") (incidentally just a day after the Pledge Agreement), incorporating the requirements in the SEBI Letter. 7.7. In light of the above, to create a pledge, the above procedure must have been necessarily followed. In fact, Regulation 79(3) specifically provides that within 15 days of receipt of the application, the depository shall after concurrence of the pledgee through its participant, "create and record the pledge" and then send an intimation of the same to the participants of the pledger and the pledgee. In the absence of that said procedure having been followed and in the absence of the Pledge Master Report being generated, it cannot be said that a pledge had been

Source: SecMarx — sebi:Order/AK/GN/2025-26/32075. 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.