sebi:VSS/AO-38/2008

SEBI · SEBI · 2004-04-13 · V.S. Sundaresan, Adjudicating Officer

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Facts / Headnote

Violation established; monetary penalty imposed jointly and severally

Provisions invoked

• s. 15A
• s. 15
• s. 15J

Regulations

• Reg. 7
• Reg. 3
• Reg. 10
• Reg. 3(4)
• Reg. 3(3)
• Reg. 3(1)(e)

Holding

The Noticees violated regulation 3(3) of SAST Regulations by failing to notify BSE and CSE at least four working days in advance of the March 26, 2004 acquisition of 11,97,425 shares (32.87%) of Sarda Plywood Industries Limited, and were held jointly and severally liable to a monetary penalty of Rs.10,000 under section 15A(b) of SEBI Act.

Full text

Page 2 of 13 FACTS OF THE CASE IN BRIEF 1. Mr.Sudeep Chitlangia submitted a report dated April 13, 2004 vide letter dated June 14, 2004 to Securities and Exchange Board of India (hereinafter referred to as “SEBI”) in terms of regulation 3(4) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the “SAST Regulations”) for acquisition of 11,97,425 shares representing 32.87% of the share/voting capital of Sarda Plywood Industries Limited (hereinafter referred to as “SPIL/ Company”) on March 26, 2004 by Mr. Sudeep Chitlangia, Abhishek Chitlangia (Minor), Akhilesh Chitlangia (Minor), Archana Chitlangia, Mr.Jaydeep Chitlangia, Mr.Jaydeep Chitlangia HUF, Madhya Bharat Papers Ltd., Mr.Purushottam Das Chitlangia, Mr.Purushottam Das Chitlangia HUF, Mr.Radheshyam Chitlangia HUF, Sheela Chitlangia, Shreya Chitlangia(Minor), Sudeep Chitlangia HUF, Chitlangia Medical Society, Deepika Chitlangia, Sunita Chitlangia, Tulsa Devi (hereinafter collectively referred to as “Acquirers/Noticees”). As the said acquisition was an ‘inter-se transfer of shares amongst qualifying promoters’ exemption was sought from the applicability of regulation 10 of SAST Regulations under regulation 3(1)(e)(iii)(b) of SAST Regulations. The shares of SPIL are listed on the Bombay Stock Exchange (hereinafter referred to as “BSE”) and Calcutta Stock Exchange (hereinafter referred to as “CSE”).

Page 3 of 13 the provisions of regulation 3(3) of SAST Regulations is reproduced as under:- In respect of acquisitions under clauses (e), (h) and (i) of sub-regulation (1), the stock exchanges where the shares of the company are listed shall, for information of the public, be notified of the details of the proposed transactions at least 4 working days in advance of the date of proposed acquisition, in case of acquisition exceeding 5 per cent of the voting share capital of the company.

Page 4 of 13 SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING 6. Show Cause Notice/s (hereinafter referred to as ‘SCN’) dated January 30, 2008 were issued to the Noticees under rule 4 of Adjudication Rules to show cause as to why an inquiry should not be held against the Noticees and penalty be not imposed on the Noticees under section 15A(b) of SEBI Act for the alleged violation specified in the said SCN.

Source: SecMarx — sebi:VSS/AO-38/2008. 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.