sebi:SD/AO-46/2009
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Facts / Headnote
Monetary penalty of Rs. 10,00,000 imposed on the Noticee for failure to comply with regulation 13(3) read with regulation 13(5) of SEBI (PIT) Regulations, 1992
Provisions invoked
- s. 15A
- s. 15
- s. 15J
Regulations
- Reg. 199
- Reg. 13(3)
- Reg. 13(5)
Parties
- Noticee (promoter group company holding shares of MSFL)
Holding
The Noticee, holding more than 5% of shares of MSFL, failed to make disclosures under regulation 13(3) read with regulation 13(5) of SEBI (PIT) within 4 working days of sales of shares that caused changes exceeding 2% of total shareholding, and was liable for monetary penalty under section 15A(b) of the SEBI Act. A penalty of Rs. 10,00,000 was imposed.
Full text
Page 2 of 12 failed to comply with regulation 13(3) read with regulation 13(5) of SEBI (Prohibition of Insider Trading) Regulations, 1992 (hereinafter referred to as “SEBI (PIT)”). It was alleged that the Noticee had violated the provisions of the said 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
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Source: SecMarx — sebi:SD/AO-46/2009. 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.