sebi:Order/KS/PP/2020-21/9437

SEBI · SEBI · 2020-03-03 · K Saravanan, Adjudicating Officer

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Facts / Headnote

Penalty imposed on the Noticee for violation of Regulation 29(2) read with Regulation 29(3) of SAST Regulations, 2011

Provisions invoked

• s. 15A
• s. 15
• s. 19
• s. 15J
• s. 28A

Regulations

• Reg. 7
• Reg. 29
• Reg. 2
• Reg. 29(2)
• Reg. 29(3)
• Reg. 7(2)
• Reg. 201

Parties

• Shri Arendra Kumar

Holding

The Noticee violated Regulation 29(2) read with Regulation 29(3) of the SAST Regulations, 2011 by failing to disclose three instances of shareholding changes exceeding 2% on January 30, 2017, February 01, 2017, and February 03, 2017, and is liable for a monetary penalty of Rs. 1,10,000 under Section 15A(b) of the SEBI Act, 1992.

Full text

Adjudication Order in the matter of RACL Geartech Limited. Page 2 of 17 alia observed that Noticee by virtue of Regulation 29(2) read with Regulation 29(3) of SAST Regulations, 2011, was required to make disclosures in relation to trading in the scrip of Target Company at three instances i.e. January 30, 2017, February 01, 2017 and February 03, 2017. However, it was observed that disclosures were not made by the Noticee on any of the aforesaid occasions and in view of the same it is alleged that the Noticee has violated the provisions of Regulations 29(2) read with Regulation 29(3) of SAST Regulations, 2011.

Adjudication Order in the matter of RACL Geartech Limited. Page 3 of 17 4. The details in respect of non-compliance by the Noticees as alleged in the SCN are as given below:- a) It was observed that Arendra Kumar was holding 10,00,000 (10.07%) shares of Target Company. b) On January 30, 2017 pursuant to sale of shares of Target Company on various dates, the shareholding of Arendra Kumar in the Target Company decreased to 8.06% from 10.07% (i.e more than 2%) The Noticee was obliged to make disclosure to BSE as stipulated under Regulation 29(2) of SAST Regulations,

Adjudication Order in the matter of RACL Geartech Limited. Page 4 of 17 Regulations, 2011 to the exchange where securities of the Target Company were listed and to the Target Company, within 2 working days from the date of change in shareholding i.e February 01,2017 ( in first instance for January 30, 2017) by February 03,2017 ( in second instance for February 01,2017 ) and by February 05,2017 (in third instance for February 03,2017). However, at no occasion any disclosure was made by the Noticee till date. f) It was observed that SEBI vide e-mail dated August 04, 2017 had sought information from CDSL dated August 16, 2017, statement of transaction of the Noticee for the aforesaid transaction carried out in the scrip of the Target Company. It was observed from the statement that there has been sale of shares of Target Company in the account of Noticee on various dates. g) It was further observed that SEBI vide letter dated May 22, 2019 sought information from the Noticee, whether any disclosure has been made for the aforementioned change in shareholding of the Noticee. h) The Noticee Vide letter dated June 14, 2019 submitted that he sold the shares of RACL through his broker SMC Global and not received any notice from his broker or SEBI to make any disclosure. The Noticee further submitted that’ “I personally have not submitted any disclosure under Regulation 29(2) read with 29(3) of SEBI (SAST) Regulation 2011.” i) Therefore, Noticee by virtue of Regulation 29(2) read with R

Source: SecMarx — sebi:Order/KS/PP/2020-21/9437. 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.