sebi:Order/GR/KG/2022-23/15912-15921
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Facts / Headnote
Total penalty of Rs. 10 Lakhs under Section 15HB of the SEBI Act, 1992 imposed on Noticees No. 1 and 2, jointly and severally, for violations of SEBI Circular dated September 3, 2009.
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 28A
- s. 391
- s. 41
- s. 279
- s. 446
- s. 167
- s. 13
- s. 102
- s. 27
- s. 2(60)
- s. 42
- s. 35
- s. 168
- s. 257
- s. 284
- s. 300
- s. 392
Regulations
- Reg. 19(1)
- Reg. 19(7)
- Reg. 76(2)
Holding
VGL and VRL violated the SEBI Circular dated September 3, 2009 by allotting shares to promoters outside the High Court-approved scheme and by delaying listing, and Noticees No. 1 and 2 as non-independent Directors in charge are liable jointly and severally to a total penalty of Rs. 10 Lakhs under Section 15HB.
Full text
Page 2 of 42 Praful Modi, Varun Corporation Limited, Varun Resources Limited and Sunbeam Talc Private Limited, for alleged allotment of equity shares to the promoters of Varun Global Limited (hereinafter referred to as “VGL”) and Varun Resources Limited (hereinafter referred to as “VRL”) which were not covered under the scheme of arrangement approved by the Hon’ble Bombay High Court vide order dated May 9, 2014 and for various other acts which have allegedly led to the contravention of various provisions of SEBI Circular No. SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009 (hereinafter referred to as “relevant SEBI Circular”). Subsequently, vide Adjudication Orders dated February 16, 2021 and August 06, 2021, the adjudication proceedings in respect of Mr. Praful Modi, Varun Corporation Limited, Varun Resources Limited and Sunbeam Talc Private Limited have been disposed of.
Page 3 of 42 if satisfied that penalty is liable, to impose such penalty deemed fit in terms of Rule 5 of the SEBI Adjudication Rules 1995 under section 15HB of the SEBI Act.
Page 4 of 42 6. It was prima facie observed by SEBI that subsequent to the scheme of arrangement, VRL had allotted 75,86,00,000 equity shares to their promoters, increasing their stake from 44.82% to 72.57% in VRL and VGL had also allotted 16,80,00,000 equity shares to their promoters increasing their stake from 30.89% to 67.40% in VGL pursuant to the scheme of restructuring under the Joint Lending Forum. It was alleged that such allotment of equity shares to their promoters pursuant to JLF on September 10, 2015 which are not covered under the Court approved scheme of arrangement, is in contravention of paragraph no. 1(d) of Part A in the annexure to the SEBI Circular dated September 3,
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