sebi:Order/PM/PA/2021-22/14572

SEBI · SEBI · 2021-05-07 · Prasanta Mahapatra, Adjudicating Officer

Reviewed by Varun Matlani, Advocate — Securities Lawyer practicing in SAT and SEBI

Facts / Headnote

Noticee held liable for violations of regulation 7(2)(a) and clause 6 of Schedule B read with regulation 9(1) of the PIT Regulations; monetary penalty imposed as deterrent

Provisions invoked

Regulations relied on

Parties

Holding

The Noticee violated regulation 7(2)(a) of the PIT Regulations by failing to make timely disclosures of transactions exceeding Rs 10 lakhs, and violated clause 6 of Schedule B read with regulation 9(1) by not obtaining pre-clearance for two transactions each exceeding Rs 10 lakhs. A monetary penalty was imposed as a deterrent.

Full text

Adjudication order in respect of Satish Kumar Agrawal Page 2 of 25 in the matter of Sanwariya Consumer Ltd. under the provisions of the PIT Regulations for the financial year 2017-2018, had violated clause 6 of the Minimum Standards for Code of Conduct to Regulate, Monitor and Report Trading by Insiders specified in Schedule B (hereinafter referred to as “Code of Conduct”) read with regulation 9(1) of the PIT Regulations by not obtaining pre-clearance from the Company before carrying out the aforesaid transactions which were above the threshold prescribed by the Company. In view of the above, adjudication proceedings were initiated against the Noticee.

Adjudication order in respect of Satish Kumar Agrawal Page 3 of 25 in the matter of Sanwariya Consumer Ltd. (i) It was observed that the Noticee was a promoter of the company from the shareholding pattern available on the website of BSE Limited and the information received from the Company vide email sent on January 04,

Adjudication order in respect of Satish Kumar Agrawal Page 4 of 25 in the matter of Sanwariya Consumer Ltd. (iv) It was observed that the Noticee had transferred 1,32,00,000 shares to a partnership firm named M/s. Shrinathji Dal Mills (hereinafter referred to as “SDM”) in which the Noticee was a partner and the cumulative disposal of shares of SCL by the Noticee resulted into decrease in shareholding of the Noticee in the Company from 8.48% (6,24,36,300 shares) to 6.69% (4,92,36,300 shares). From the table above, it was observed that each of the transactions executed by the Noticee exceeded Rs. 10 lakhs. The Company in its reply vide email sent on June 02, 2018 forwarded the copy of the disclosure submitted by the Noticee to the Company under regulation 7(2)(a) of the PIT Regulations wherein it was observed that the Noticee had made combined disclosure for sale/ disposal of 1,32,00,000 shares of SCL and the date of receipt of the disclosure by the Company was February 01, 2018 i.e., there was a delay in submitting the disclosure ranging from 45 days to 50 days for the respective transactions tabulated in the paragraph above. Taking the aforesaid paragraphs into consideration, it was alleged that the transactions undertaken by the Noticee had triggered disclosure requirements under the provisions of regulation 7(2)(a) of the PIT Regulations which was not complied with within the stipulated time.

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Source: SecMarx — sebi:Order/PM/PA/2021-22/14572. 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.