sebi:VSL/AO/DRK/AS/EAD-3/39/2009
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Facts / Headnote
Penalty of Rs. 3,00,000 imposed under Section 15A(b) for violation of Regulation 6(2) and 8(3)
Provisions invoked
- s. 15A
- s. 15
- s. 15H
- s. 15J
Regulations
- Reg. 6
- Reg. 8
- Reg. 8(3)
- Reg. 6(2)
Parties
- Vertex Securities Ltd.
Holding
The noticee, Vertex Securities Ltd., violated Regulation 6(2) and Regulation 8(3) of the SEBI Takeover Regulations and was held liable under Section 15A(b) of the SEBI Act, 1992, with a consolidated penalty of Rs. 3,00,000 imposed.
Full text
Page 2 of 7 (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as ‘Rules’) to inquire into and adjudge under Section 15A(b) of the SEBI Act, 1992 the violations of the provisions of Regulation 6(2) and 8(3) of the SEBI Takeover Regulations.
Page 3 of 7 the part of the noticee to comply with the Regulations. There was no substantial transactions during this period and the promoters’ holding remained more or less the same at around 70% of the total paid up and voting capital of the company until 2006. (c) After the Share Purchase Agreement entered into between the erstwhile promoters and Transwarranty Finance Ltd. and Mr. Kumar Nair, the noticee has been taken over by Transwarranty Finance Ltd. An open offer has also been made at the highest price of Rs. 31 per share to the investors, considering all the violations and non compliance.
Page 4 of 7 exchanges on which the shares of the company are listed, within three months of notification of the SEBI Takeover Regulations. The SEBI Takeover Regulation was notified on February 20, 1997. In view of the said notification the due date for the aforesaid disclosures was May 20, 1997 but the noticee had disclosed the same only on May 25, 2007 i.e. after a lapse of more than 10 years. The same is also confirmed by the status of compliance report dated ‘Nil’ signed by the Compliance officer of the noticee Shri K.J. Thomas detailing that there has been a delay of 3655 days in compliance with Regulation 6(2) of SEBI Takeover Regulations. When the noticee was sought an explanation for such an undue delay, the noticee admitted the delay on its part in making disclosures in accordance with Regulation 6(2) of SEBI Takeover Regulations and submitted that it was not aware of the legal requirements of Regulation 6(2) of SEBI Takeover Regulations since the company did not have a qualified Company Secretary. In view of the said acceptance of default in making disclosures under Regulation 6(2) of SEBI Takeover Regulations by the noticee itself it is concluded that the violation of Regulation 6(2) is established against the noticee.
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Source: SecMarx — sebi:VSL/AO/DRK/AS/EAD-3/39/2009. 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.