sebi:WTM/PS/18/CFD/MAY/2016
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Facts / Headnote
Directions issued vide the interim order dated June 04, 2013 against Mr. Sanjiv N. Shah vacated, with a warning to be cautious in future.
Provisions invoked
- s. 19
- s. 21
- s. 12A
- s. 29
Parties
- Mr. Sanjiv N. Shah
- Andhra Pradesh Tanneries Limited
Holding
The directions issued against Mr. Sanjiv N. Shah, an Independent Non-Executive Director of Andhra Pradesh Tanneries Limited, vide the interim order dated June 04, 2013 for non-compliance with minimum public shareholding requirements are vacated, with a warning that his responsibility as an Independent Director is not diminished.
Full text
Page 2 of 7 above mentioned non-compliant companies, till such time these companies comply with the minimum public shareholding requirement. i. For the purpose of above direction, proportionate promoter/ promoter group shareholding shall be computed on the basis of the public shareholding in the company; e.g. if public shareholding in a company after the deadline is less than 25%, say 10%, in such case, the proportionate promoter shareholding would be 30% (i.e. three times the existing public shareholding). Thus the excess promoter/promoter group holding i.e. 60% shall be frozen till the minimum public shareholding requirement is complied with. ii. In case of more than one entity in the promoter/promoter group in a company, the excess promoter holding for the purpose of taking action shall be computed on a proportionate basis. For illustrating the example above, if there are three promoters; A, B and C with shareholdings of 45%, 35% and 10% respectively; the excess promoter holding of 60% shall be allocated as follows: 1. A:- (60% multiplied by [45%/45%+35%+10%]) = 30.00% 2. B:- (60% multiplied by [35%/45%+35%+10%]) = 23.33% 3. C:- (60% multiplied by [10%/45%+35%+10%]) = 06.67%
Page 3 of 7 3. Pursuant to the same, one Mr. Sanjiv N. Shah preferred an appeal before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as ‘SAT’). Hon’ble SAT vide its
Page 4 of 7 d. The shares of the Company were traded only during the financial year 1999, in physical form. Thereafter for last more than 15 years, no trading in the shares of the Company have taken place. The Company is regularly complying with all the disclosure requirements. e. He was invited by the Company to join as an Independent Non-Executive Director to assist and guide the Company on its revival plan. Based on his qualification and experience, he had rendered his services to the Company and helped it to raise necessary finance for the Company. However, the Company could not revive its business plan and its shares had remained suspended from trading at the Stock Exchange. f. He was never involved in the day to day management of the Company. He was regularly making request for relieving from the directorship, however, the management was reluctant to accept his resignation. Later, on December 10, 2013, his resignation was accepted and was also taken on record by the Company. g. He had no role and responsibility for dilution of the shareholding of the Company even when he was functioning as an Independent Non-Executive Director of the Company. Further, after resignation, he has no connection with the Company of any nature whatsoever. h. As an Independent Non-Executive Director, he should not be held responsible for the alleged non-compliances. He should not be held liable in personal capacity or punished for any acts and omission of the Company, on its no-compliance with
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Source: SecMarx — sebi:WTM/PS/18/CFD/MAY/2016. 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.