sebi:PB/AO-48-55/2011
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Facts / Headnote
Violation of regulation 11(1) of SAST Regulations not established; violation of regulation 11(2) of SAST Regulations established; monetary penalty of Rs. 10,00,000 imposed jointly and severally on the Noticees under section 15H(ii) of the SEBI Act.
Provisions invoked
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 199
- Reg. 10
- Reg. 11
- Reg. 11(1)
- Reg. 8(3)
- Reg. 21(1)
- Reg. 11(2)
- Reg. 20(4)
- Reg. 20(4)(c)
Parties
- M/s Naivedhya Consultants Pvt Ltd.
- M/s Abhimukt Financial Pvt Ltd.
- M/s Sidhkay Consultants Pvt Ltd.
- M/s Adihan Consultants Pvt Ltd.
- M/s Chrysalis Finance Ltd.
- M/s Chrysalis Industries Ltd.
- Mr. Sunil Kumar Handa
- Mrs. Divyadeepti Handa
Holding
The Noticees did not violate regulation 11(1) of SAST Regulations as no fresh shares were allotted in March 2004, but they violated regulation 11(2) of SAST Regulations by acquiring additional shares in December 2004, April 2005, June 2006 and September 2006 without making a public announcement of offer, and are liable for a monetary penalty of Rs. 10,00,000 under section 15H(ii) of the SEBI Act.
Full text
Page 2 of 24 Companies Act, 1956 having its registered office at Core House, off C.G.Road, Near Parimal Garden, Ellisbridge, Ahmedabad – 380 006. The shares of CEL are listed on National Stock Exchange of India Ltd. (hereinafter referred to as ‘NSE’) and Bombay Stock Exchange Ltd. (hereinafter referred to as ‘BSE’). M/s Naivedhya Consultants Pvt Ltd., M/s Abhimukt Financial Pvt Ltd., M/s Sidhkay Consultants Pvt Ltd., M/s Adihan Consultants Pvt Ltd., M/s Chrysalis Finance Ltd., M/s Chrysalis Industries Ltd., Mr. Sunil Kumar Handa, and Mrs. Divyadeepti Handa (hereinafter referred to as ‘Noticees/Promoter Group’) are the erstwhile promoter Group of CEL and are the persons acting in concert.
Page 3 of 24 of the Noticees had increased from 50.68% to 57.36% i.e. by 6.68%. As the acquisition of 9,09,056 shares by the Noticees, representing 6.68% of paid up equity share capital of CEL on March 31, 2004, which is beyond the threshold limit of 5% specified under regulation 11(1) of SAST Regulations were made without making public announcement of offer, thus, it was alleged that the Noticees had violated regulation 11(1) of SAST Regulations and therefore, liable for monetary penalty under section 15H(ii) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the ‘SEBI Act’). Further, as Noticees were together holding more than 55% of the shares/voting rights of CEL, they also acquired additional shares/voting rights by acting in concert with one another during the years 2004 to 2006 from open market. As the acquisition by Noticess of 0.49%, 0.13%, 0.83% and 1.09% shares of CEL in the months of December 2004, April 2005, June 2006 and September 2006 respectively were made without making public announcement as specified under regulation 11(2) of SAST Regulations, thus, it was alleged the Noticees had violated regulation 11(2) of SAST Regulations and therefore, liable for monetary penalty under section 15H(ii) of SEBI Act.
Page 4 of 24 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 4. Show Cause Notice Nos. EAD-7/PB/AK/5007/2010, EAD- 7/PB/AK/5008/2010, EAD-7/PB/AK/5010/2010, EAD- 7/PB/AK/5014/2010, EAD-7/PB/AK/5016/2010, EAD- 7/PB/AK/5018/2010, EAD-7/PB/AK/5019/2010, and EAD- 7/PB/AK/5021/2010 all dated May 11, 2010 (hereinafter referred to as “SCNs”) was issued to the Noticees respectively under rule 4 of the Rules to show cause as to why an inquiry should not be initiated against them and penalty be not imposed under section 15H(ii) of SEBI Act for the alleged violation of regulations 11(1) & 11(2) of SAST Regulations. The aforesaid SCNs were delivered to the Noticees via Western Regional Office (WRO) of SEBI on May 20, 2010, as per the signed acknowledgement received from one Shri Anand P. Assistant Company Secretary, who identified himself as authorized signatory for the Noticees.
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Source: SecMarx — sebi:PB/AO-48-55/2011. 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.