sebi:PG/AO/SPV/119/2013

SEBI · SEBI · 2011-08-02 · Piyoosh Gupta, Adjudicating Officer

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Facts / Headnote

Noticee held liable and penalty imposed

Provisions invoked

• s. 15A
• s. 15
• s. 12A
• s. 12
• s. 15H
• s. 15J

Regulations

• Reg. 7
• Reg. 3
• Reg. 11
• Reg. 8
• Reg. 4(2)

Parties

• Dear Investment Private Limited

Holding

The Noticee violated regulations 3(a),(b),(c)&(d), 4(1) and 4(2)(f) of PFUTP Regulations read with Section 12A(a),(b)&(c) and regulations 7(1A) and 8(2) of Takeover Regulations for inflated promoter shareholding disclosures, and is liable to a total penalty of Rs 7,00,000; violation of regulation 4(2)(e) was not established.

Full text

Adjudication Order in the matter of GHCL Ltd. Page 2 of 17 2. The investigations revealed that GHCL made wrong disclosures to stock exchanges about the shareholding of its promoter entities including M/s Dear Investment Private Limited (the Noticee) for eight quarters from March 31, 2007 to December 31, 2008. The investigation revealed that during these 8 quarters, the promoter shareholding as disclosed by GHCL to the stock exchanges was more than the actual number of shares held by those promoter entities including Noticee as per the records of Registrar and Transfer Agent. The investigation revealed that the promoter entities including the Noticee had included shareholding of third parties with their shareholding which resulted in falsely inflated shareholding of promoter entities in GHCL in the quarterly disclosures to the stock exchanges. Thus, it was alleged that the Noticee acted in violation of regulations 3 (a), (b), (c) and (d), 4 (1) and 4 (2) (e) and (f) of the PFUTP Regulations read with section 12 A(a), (b) & (c) of SEBI Act and regulation 8 (2) of Takeover Regulations for the financial year ended March 31, 2008. Further, the Noticee along with other promoter entities had contributed to 2% or more change in shareholding that was triggered on April 27, 2007, October 5, 2007, December 20, 2007, January 15, 2008, February 15, 2008, April 7, 2008, May 2, 2008, May 16, 2008, May 29, 2008, June 10, 2008 and June 19, 2008 and the Noticee was required to make disclosure

Adjudication Order in the matter of GHCL Ltd. Page 3 of 17 APPOINTMENT OF ADJUDICATING OFFICER 3. The undersigned was appointed as the Adjudicating Officer vide

Adjudication Order in the matter of GHCL Ltd. Page 4 of 17 30, 2012, the Noticee, vide letter dated February 09, 2012 sought 8 weeks time to file the reply and also intimated that it prefers to file consent application for settling the proceedings. Accordingly, vide letter dated February 16, 2012, the Noticee filed the consent application with SEBI. As the Adjudication Proceedings were in progress, vide letter dated March 30, 2012, the Noticee was advised to appear for personal hearing on April 10, 2012. On April 10, 2010, the authorized representative of the Noticee appeared on behalf of the Noticee and sought an extension of 15 days to file the reply. Thereafter vide letter dated June 16, 2012, the Noticee submitted its reply to the SCN. Vide letter dated June 22, 2012, the Noticee was advised to appear for personal hearing on July 02, 2012 when the authorized representative of the Noticee appeared and made submissions. Subsequently, vide letter dated July 29, 2013, the Noticee informed that it prefers to withdraw the consent application filed with SEBI. Communication dated July 31, 2013 regarding the withdrawal of the consent application of the Noticee was received from SEBI also. Thereafter, vide letter dated July 30, 2013, the Noticee requested for 15 days time for filing its additional

Source: SecMarx — sebi:PG/AO/SPV/119/2013. 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.