sebi:Order/VV/NK/2021-22/12353-12355

SEBI · SEBI · 2020-03-03 · Vijayant Kumar Verma, Adjudicating Officer

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Facts / Headnote

Violations upheld; monetary penalty imposed on Noticees

Provisions invoked

Regulations

Parties

Holding

The Noticees were held to have violated Section 16 of SC(R)A, 1956 read with SEBI Notifications and Section 13 and Section 18 read with Section 2(i) of SC(R)A, 1956 for off-market transactions without consideration, and Regulation 29(1) read with Regulation 29(3) of SEBI (SAST) Regulations, 2011 for failure to disclose change in shareholding upon crossing 5%. Monetary penalties were imposed under Section 23H of SC(R)A, 1956 on Noticee No. 1 and under Section 15A(b) of SEBI Act, 1992 on all three Noticees.

Full text

In the matter of scrip of Jyoti Limited. Page 2 of 28 the allegation is with respect to acquisition of shares. The focus of the investigation was to ascertain whether there was any open offer / disclosure violations by certain entities under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as “SEBI (SAST) Regulations, 2011”) in the scrip of Jyoti Ltd. during the period between January 01 ,2014 to June 30 ,2014 (hereinafter referred to as “investigation period”). However, wherever deemed necessary, reference was also made to outside this investigation period during an investigation.

In the matter of scrip of Jyoti Limited. Page 3 of 28 3. Further, from the analysis of common directorship upon perusal of replies from the Noticee No. 1, it was observed during investigation period that the following groups of entities Viz. Hridaynath Group & its Person Acting in Concerts (hereinafter also referred to as PACs) namely, (i) Hridaynath Consultancy Pvt. Ltd., (ii) Vanraj Vinodchandra Shah (hereinafter also referred to as Noticee No. 2) and (iii) Vanraj Vinodchandra Shah HUF (hereinafter also referred to as Noticee No. 3) fall under the definition of ‘persons acting in concert’ in terms of Regulation 2(1)(q)(2)(i), (ii), (iii) & (v) of SEBI (SAST) Regulations, 2011. Noticee No. 1 had transacted in the scrip of Jyoti during the investigation period and received 250,000 shares of Jyoti Ltd. through an off market transaction, which led to increase in shareholding of Noticee No. 1 along with PACs from 4.13% to 5.59% in Jyoti Ltd. However, the Noticee No. 1, 2 and 3 (hereinafter collectively referred to as Noticees) failed to make relevant disclosures to the stock exchange and the company regarding the changes in shareholding as prescribed under SEBI (Substantial Acquisitions of Shares and Takeovers) Regulations, 2011. It was observed by IA that the Noticee No. 1, 2 & 3 acting as PACs have violated the provisions of Regulation 29(1) read with Regulation 29(3) of SEBI (SAST) Regulations, 2011.

In the matter of scrip of Jyoti Limited. Page 4 of 28 Noticee No. Name of the Noticee Violations observed Initiation of Adjudication under the legal provisions 1 Hridaynath Consultancy Pvt. Ltd. Section 16 of SC(R)A, 1956 read with SEBI Notification S.O 184(E) dated March 1, 2000 & SEBI Notification No. LAD- NRO/GN/2013- 14/26/6667 dated October 03, 2013, Section 13 and Section 18 of SC(R)A, 1956 read with Section 2(i) of SC(R)A, 1956.

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Source: SecMarx — sebi:Order/VV/NK/2021-22/12353-12355. 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.