sebi:Order/BM/DS/2023-24/30036

SEBI · SEBI · 2023-04-25 · Barnali Mukherjee, 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

Violation established; penalty of Rs. 3,00,000 imposed under Section 15HB

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 13
• Reg. 31(2)
• Reg. 70(3)

Parties

• First Overseas Capital Limited

Holding

The Noticee, lead manager for Sakuma Exports Limited rights issue, violated Regulation 70(3) of ICDR Regulations, 2018 and Clauses (4) and (6) of Schedule III read with Regulation 13 of Merchant Bankers Regulations, 1992 by failing to exercise due diligence in the DLoF dated August 04, 2022, and is liable to penalty under Section 15HB of the SEBI Act, 1992, quantified at Rs. 3,00,000.

Full text

Adjudication Order in the matter of First Overseas Capital Limited Page 2 of 25 APPOINTMENT OF ADJUDICATING OFFICER 3. The undersigned was appointed as the Adjudicating Officer (AO) vide Order dated April 25, 2023 under Section 15-I of the SEBI Act, 1992 and rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as “SEBI Adjudication Rules”), to inquire into and adjudge under section 15HB of SEBI Act, 1992, the alleged violations of provisions of ICDR Regulations and Merchant Bankers Regulations against the Noticee.

Adjudication Order in the matter of First Overseas Capital Limited Page 3 of 25 5.1.4. Financial details with respect to working capital requirement forming object of the issue. 5.2. Thus, it was alleged that the Noticee has violated the provisions of Regulation 70(3) of ICDR Regulations, 2018 and Clauses (4) and (6) of Schedule III read with Regulation 13 of Merchant Bankers Regulations, 1992.

Adjudication Order in the matter of First Overseas Capital Limited Page 4 of 25 combined, merged and disclosed. Whereas in the table showing details of the shareholders holding more than 1% of the issued and paid-up equity share capital as on March 31, 2022, inadvertently, only 1 folio of Sakuma Infrastructure And Realty Private Limited has been disclosed. However, the same has been modified and disclosed in the updated DLOF dated February 23, 2023. 6.4. Thus, the shareholding pattern as disclosed on the stock exchange website as well in the DLOF date August 04, 2022 and subsequent updated DLOF dated February 23, 2023 were correct and does not imply to be incorrect shareholding pattern disclosure. 6.5. With respect to incorrect information with respect to offices, branches and sub- offices of the Company, Noticee submitted that Sakuma had opened its offices, branches and sub-offices at various places for their activities. The same was not reflected in DLoF dated August 04, 2022 as Sakuma had informed to the Noticee only about its office premise which was stated in the DLoF dated August 04, 2022. Subsequently, the same was disclosed in the update DLoF dated February 23, 2023. 6.6. With respect to incorrect information with respect to country-wise-product-wise exports for the financial year 2021-22, Noticee submitted the following 6.6.1. As per the DLoF dated August 04, 2022, the figures were shown with ‘India’ under the exporters country whereas it cannot be taken into account

Source: SecMarx — sebi:Order/BM/DS/2023-24/30036. 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.