sebi:SD/AO-45/2009
This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.
Facts / Headnote
Monetary penalty imposed
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 199
- Reg. 13(3)
- Reg. 13(5)
Holding
The Noticee violated regulation 13(3) read with regulation 13(5) of SEBI (PIT) by failing to disclose sale of shares exceeding 2% and is liable under section 15A(b) of the SEBI Act. A monetary penalty of Rs. 10,00,000 was imposed on the Noticee.
Full text
Page 2 of 12 regulations and therefore, liable for monetary penalty under section 15A(b) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’).
Page 3 of 12 • We sold the shares of MSFL during the period of February 2005. Our holding & disclosures were made to public by the disclosure of the shareholding pattern as filed under cl. 35 of the Listing Agreement. SEBI (Prohibition of Insider Trading) Regulations, 1992 also talks about a disclosure which will not mislead the public. Small company like us, it is burdensome, troublesome & very difficult to keep thousand of regulations & compliance thereof for no reason. The object set out by regulator is simple not to mislead the public. • There were no corporate announcements of intimation at that time by MSFL. We sold the shares as part of our immediate financial need at that time for our survival. The Shareholding Pattern under cl. 35 of the Listing Agreement which per se a market disclosure for the quarter ended 31st March 2005 intimated & published in the BSE site talks about the sell of shares. Our sell of shares neither affected the market nor related to any alleged manipulation of the script. It was a mere submission of the sell of the shares under the SEBI (Prohibition of Insider Trading) Regulation, 1992. • Taking into account the object of the regulation & the need for the disclosure, in this case our non disclosure had not impacted anybody.
Page 4 of 12 i. The promoters of all the three companies are same i.e. a. M/s. Clarus Finance & Securities Limited (formerly known as Mittal Securities Finance limited – a BSE listed Company; b. M/s. Platinum Finvest Private limited; and c. M/s. Pragari Finvest Private Limited. ii. The company sold part of shares of M/s. Mittal securities during the period February 2, 2005 to February 14, 2005 to return the loan of MSL. iii. The company is a small company. And it was difficult at the relevant time to appoint and manage persons who has adequate knowledge of Securities Act and Regulations as framed under the SEBI Act. iv. It is an admitted position that we failed to make intimation/disclosures as required under regulation 13(3) & 13 (5) of the IT Regulation 1992 to (i) the company for the following reasons : a. The companies involved are small companies; b. There were no adequate and qualified staff; c. The promoters were not well conversant with the said applicable regulations i.e. IT Regulation 1992; d. The error was inadvertent and accidental (for lack of knowledge of the applicable Regulation) ; v. The disclosure under regulation 13(3) & 13 (5) of the IT Regulation 1992 with the stock Exchange are purely for dissemination of information for use of public. The object of the legislation is purely to protect the interest of the investors. Though our sale of shares we failed to intimate under the said regulation but till as on date there were no complaint or reference of the al
You have read the preview. Create a free account to read the full order, track this party, and analyse it in Ontology.
Free accounts include 10 searches/day with full order access.
Source: SecMarx — sebi:SD/AO-45/2009. 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.