sebi:Order/VV/AA/2021-22/13269-13273

SEBI · SEBI · 2017-06-08 · Vijayant Kumar Verma, Adjudicating Officer

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

Facts / Headnote

Penalty imposed on all Noticees jointly and severally for incorrect disclosures under SAST Regulations

Provisions invoked

Regulations relied on

Parties

Holding

The four Dubai-based companies (Al Juraina, Al Layyah, Al Mareija, Mankool) were held to be Persons Acting in Concert (PACs) with Atlas Jewellery Pvt. Ltd. (AJPL) for the preferential allotment of shares on January 15, 2014, and the Noticees were found to have made incorrect disclosures in violation of Regulations 29(2), 30(1) and 30(2) of the SAST Regulations. A penalty of Rs. 5,00,000 was imposed jointly and severally on all Noticees under Section 15A(b) of the SEBI Act.

Full text

Page 2 of 33 total equity/voting share capital of the Target Company was filed by Merchant Banker, D&A Financial Services (P) Limited (hereinafter referred to as “MB”) on behalf of Mr. M M Ramachandran (hereinafter referred to as “MMR”) along with AJPL in terms of regulation 3 (1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as “SAST Regulations”).

Page 3 of 33 APPOINTMENT OF ADJUDICATING OFFICER 5. Shri Jeevan Sonparote was appointed as the Adjudicating Officer vide order dated June 8, 2017, under section 19 read with section 15I(1) of the SEBI Act, 1992 (hereinafter referred to as “SEBI Act”) and Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as “Adjudication Rules”) to conduct adjudication proceedings in the manner specified under Rule 4 of Adjudication Rules read with section 15I (1) and (2) of SEBI Act, and if satisfied that penalty is liable, impose such penalty deemed fit in terms of Rule 5 of Adjudication Rules and Section 15A(b) of SEBI Act. Pursuant to the transfer of Shri Jeevan Sonparote, the undersigned has been appointed as the Adjudicating Officer, vide communique dated August 13, 2019.

Page 4 of 33 (iii) The maximum amount of funds required to make payment of consideration of the Offer Price for the shares tendered in the Offer (assuming full acceptances) would have been Rs. 54,95,73,780/- (Maximum Consideration). The Acquirer deposited a sum of Rs. 14,00,00,000/- in the Escrow Account opened with Axis Bank Ltd. (iv) Preferential allotment of shares was made on January 15, 2014 to 4 Dubai based companies viz. Al Juraina Precious Metals & Bullions (19.08%), Al Layyah General Trading (24.06), Al Mareiha Precious Metal and Bullions (24.66%) & Mankool General Trading (23.90%) (collectively “four noticees”), all of them being single shareholder companies. The shares issued under the preferential allotment constituted 4,64,49,333 equity shares representing 91.70% of the total post allotment share capital. (v) Agreements (annexure 2) were executed between the Target Company, promoters and four noticees. The Agreement, in its clauses 7.1 and 7.2 mentioned that “the investors are making a financial investment in the Company and that they will never interfere into the management of the company nor will they ask for any supervision over the affairs of the Company”. It further states that the “investors will have no right to appoint or nominate the directors of the Company and that the company shall continue to be managed by its present directorship composition as the Board of Directors of the Company thinks fit.” (vi) It is on records that excess share application mon

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Source: SecMarx — sebi:Order/VV/AA/2021-22/13269-13273. 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.