sebi:Order/SBM/AK/2022-23/17337

SEBI · SEBI · 2020-11-17 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Penalty imposed on Noticee for violation of Regulation 3(12) of SBEB Regulations

Provisions invoked

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

Regulations

• Reg. 29
• Reg. 3(12)
• Reg. 3(13)
• Reg. 3(15)
• Reg. 3(14)

Parties

• Bharti Infratel Limited (now known as: Indus Towers Limited)

Holding

The Noticee violated Regulation 3(12) of the SBEB Regulations by failing to appropriate 5,32,862 unappropriated shares held by the ESOP Trust by March 31, 2017, and a penalty of Rs. 1,00,000 was imposed under Section 15HB of the SEBI Act.

Full text

Adjudication order in the matter of Bharti Infratel Limited Page 2 of 16 APPOINTMENT OF ADJUDICATING OFFICER 3. The undersigned was appointed as the Adjudicating Officer (‘AO’) vide communique dated November 17, 2020 under Section 19 of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) read with Section 15-I of the SEBI Act and Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 (hereinafter referred to as ‘Adjudication Rules’), to inquire into and adjudge under the provisions of section 15HB of the SEBI Act, the aforementioned alleged violation of the provisions of law by the Noticee.

Adjudication order in the matter of Bharti Infratel Limited Page 3 of 16 iii. The Company informed SEBI that the unappropriated shares were parked for sale at a subsequent point in time as SBEB Regulations do not prescribe any specific timeline sale of unappropriated shares held by ESOP Trust. iv. The relevant provisions of SBEB Regulations are reproduced below: “3(12) The un-appropriated inventory of shares which are not backed by grants, acquired through secondary acquisition by the trust under Part A, Part B or Part C of Chapter III of these regulations, shall be appropriated within a reasonable period which shall not extend beyond the end of the subsequent financial year: Provided that if such trust(s) existing as on the date of notification of these regulations are not able to appropriate the un-appropriated inventory within one year of such notification, the same shall be disclosed to the stock exchange(s) at the end of such period and then the same shall be sold on the recognized stock exchange(s) where shares of the company are listed, within a period of five years from the date of notification of these regulations.

Adjudication order in the matter of Bharti Infratel Limited Page 4 of 16 ix. The alleged violation of the Regulation 3(12) of the SBEB Regulations by the Noticee, if proved, makes it, liable for penalty under the provisions of section 15HB of the SEBI Act. The text of the said provision of law is mentioned as under:- SEBI Act 15HB Penalty for contravention where no separate penalty has been provided. - Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to a penalty which may extend to one crore rupees.

Source: SecMarx — sebi:Order/SBM/AK/2022-23/17337. 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.