sebi:Order/GR/AE/2019-20/6494-6496
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Facts / Headnote
Show Cause Notice disposed of; no penalty imposed on any Noticee
Provisions invoked
- s. 15A
- s. 15
- s. 15H
- s. 15I
Regulations
- Reg. 7
- Reg. 199
- Reg. 29(1)
- Reg. 29(2)
- Reg. 29(3)
- Reg. 7(2)
- Reg. 201
- Reg. 9
- Reg. 9(1)
Parties
- Late Mr. Anil B Lodha and Ms. Manjusha Lodha (Noticee 1)
- M/s ABL Infrastructure Private Limited (Noticee 2)
- Col. Surinder Singh Kadyan (Retd) (Noticee 3)
Holding
No penalty is warranted against Noticee 1 and 2 for alleged violation of Regulation 29(2) read with 29(3) of SAST Regulations, 2011 as the reduction in shareholding was due to sale of shares, and no penalty is warranted against Noticee 3 for contra trades as the action already taken by IISL was commensurate with the violation.
Full text
Page 2 of 12 2. It was observed that during the examination period two entities viz. Late Mr. Anil B Lodha, and his wife, Ms. Manjusha Lodha (hereinafter referred to as “Noticee 1”) and also were Directors in M/s ABL Infrastructure Private Limited (hereinafter referred to as “Noticee 2”), and accordingly all of them were deemed to be Person Acting in Concert (PAC). On perusal of their trading activities, it was observed that the combined shareholding of the PAC in IISL was 61,91,905 shares (12.21%) as on 31/07/2017, and the same reduced to as follows – i. 4603726 shares (9.08%) on 09/10/2017 ii. 3408371 shares (6.72%) on 27/10/2017 iii. 1238371 shares (2.44%) on 03/11/2017 As the aforesaid changes in shareholding was more than 2%, the PAC were required to make disclosures for such changes to the company and the Stock Exchanges within 2 working days of the transactions under Regulation 29(2) read with 29(3) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 (SAST Regulations, 2011). However, it was alleged that they failed to do so, and accordingly adjudication proceedings were initiated against Noticee 1 and 2 for alleged violation of Regulation 29(2) read with 29(3) of SAST Regulations, 2011.
Page 3 of 12 Noticee 3 are in the nature of contra trades. It is thus alleged that Noticee 3 had executed contra trades within a period of 6 months and accordingly adjudication proceedings was initiated against Noticee 3 for alleged violation of Code of Conduct as prescribed in Clause 10 of Schedule B of Regulation 9 (1) of SEBI (Prohibition of Insider Trading Regulations, 2015) (PIT Regulations, 2015).
Page 4 of 12 and hospitalization. His earlier track record regarding compliance is without blemish. iv. The very extraordinary circumstances deserve lenient treatment. v. Not each and every case of violation of provision should necessarily result in penalty. vi. They have not made any gain or advantage whatsoever, quantifiable or not on account of the delayed disclosure.No loss has been caused to any investor or group of investor on account of delayed disclosure. vii. They are a non-controlling group of shareholders. They were not directors or promoters or part of the Promoter Group of IISL. viii. Sale of shares was not on account of any negative factors in the company but on account of need of finance due to the obvious reasons of serious illness and expensive medical treatment. ix. There have not been any repetitive defaults. They have made due disclosures wherever required in the past or later. They also made a prompt disclosure on coming to know. x. No malafide intent was involved.
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Source: SecMarx — sebi:Order/GR/AE/2019-20/6494-6496. 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.