sebi:SD/AO/108/2010
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Facts / Headnote
Penalty of Rs. 1,00,000 imposed under Section 15A(b)
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 7
- Reg. 11
Parties
- Dr. C. Ramesh Babu
Holding
Dr. C. Ramesh Babu violated Regulation 7(1A) of the Takeover Regulations by selling 1,30,435 shares of DHL constituting 2.64% voting rights without disclosure to the company and stock exchanges, and was held liable under Section 15A(b) of the SEBI Act with a penalty of Rs. 1,00,000.
Full text
Page 2 of 7 Adjudicating Officer) Rules, 1995 (hereinafter referred to as the Adjudication Rules) in place of Ms Babita Rayudu to inquire into and adjudge under Section 15A(b) of the SEBI Act, 1992 (hereinafter referred to as the ‘Act’), for the aforesaid violations. SHOW CAUSE NOTICE/REPLY/PERSONAL HEARING :
Page 3 of 7 SCN, submissions of the Noticee and the documents available on record. The issues that arise for consideration in the present case are stated and determined, as follows a. Whether the Noticee had violated the abovementioned provisions of Takeover Regulations? b. If, yes whether the Noticee is liable for monetary penalty prescribed under Sections 15A(b) of the SEBI Act for the aforesaid violations ? c. If, yes what should be the quantum of monetary penalty ?
Page 4 of 7 during which such failure continues or one crore rupees, whichever is less.; … …. 8. I have observed from the documents available on record that the Noticee along with other promoter entities had hold 16,47,675 shares i.e. 33.28% of the total holding i.e. voting rights in DHL as on April, 2005. Subsequently the Noticee had sold 1,30,435 shares of DHL to Mr. V. V. Reddy resulting into reducing the composite stake of promoters’ to 30.65% of DHL. The Noticee had sold 2.64% of voting rights in DHL. As the Noticee had reduced his holding more than 2% as stipulated in regulation 7(1A) of the Takeover Regulations, he was under obligation to make proper disclosure as per Regulation 7(1A) of the Takeover Regulations. The Noticee was required to disclose his share holding pattern in the scrip of DHL to the stock exchanges as well as to the company DHL as per Takeover Regulations. However, the Noticee failed to make any disclosure to this effect. It is observed from the documents available on record that no disclosures were made as per the regulatory requirement. Further, the Noticee has also accepted vide letter dt 7th March, 2007 addressed to Dr. K C Reddy, ED, Devaki Hospital Pvt. Ltd. that he had not made any disclosure to the company DHL.
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Source: SecMarx — sebi:SD/AO/108/2010. 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.