Regulations
SEBI slaps Rs2 lakh fine on four persons in Empower Industries case

The regulator found that the entities together had received a total of 51,000 shares or 10.2% stake of EIIL, in physical form from the company's promoter—Devang Master, but failed to make a disclosure

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs2 lakh on four members of one “Gupta Family”, for failing to make disclosures related to their transactions in shares of Empower Industries India (EIIL), reports PTI.

 

SEBI said that the fine slapped on members of Gupta family—Om Prakash Gupta, Shakuntala Gupta, Neeru Gupta and Charu Gupta—has to be jointly paid by them.

 

The regulator found that the entities together had received a total of 51,000 shares or 10.2% stake of EIIL, in physical form from the company's promoter—Devang Master.

 

As per SEBI norms, this transaction required the Gupta family, acting in concert with each other, to disclose their shareholding to the company and to the concerned stock exchanges.

 

In its order issued Monday, SEBI said, “There is nothing on record to show that the required disclosures were made by the Gupta Family to the company and to BSE”.

 

The matter relates to a probe conducted by SEBI for alleged irregularities in shares of EIIL between 16th February and 11 March 2005.

 

The regulator found that the company’s share surged from Rs81 to Rs113 during 18 trading days and total trading volume stood at 2.17 lakh shares.

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Diageo submits info on United Spirits open offer

Diageo has submitted its replies to clarifications sought by SEBI on the open offer for United Spirits and the market regulator would take a decision in due course

Mumbai: Global liquor major Diageo Plc has submitted details sought by market regulator Securities and Exchange Board of India (SEBI) regarding its Rs5,441 crore open offer for buying stake in Vijay Mallya-led United Spirits, reports PTI.

 

The open offer to buy 26% stake in United Spirits, which was to start yesterday, was postponed pending final approval from SEBI.

 

“Diageo has submitted its replies to clarifications sought by SEBI on the open offer for United Spirits. SEBI will take a decision in due course,” a source said.

 

Last month, SEBI had asked for some clarifications on the from Diageo’s open offer, part of a deal to buy up to 53.4% stake in United Spirits.

 

On Monday, United Spirits had informed the stock exchanges that the open offer has been postponed.

 

JM Financial, the manager for the open offer, has said that since the “final observations from SEBI” are awaited, the schedule has been revised.

 

“...the revised schedule of activities will be intimated in due course,” according to a filing made by United Spirits to the BSE.

 

As per the detailed public statement (DPS) issued in November last year, Diageo’s open offer was to begin yesterday.

 

Diageo is to acquire a 27.4% stake in United Spirits, through a combination of purchase of shares from existing promoters and a preferential allotment of share, for Rs5,725.4 crore.

 

Any acquisition of 25% or more stakes in a listed company triggers a mandatory open offer for purchase of additional 26% stake from the public shareholders and the same needs to be cleared by the market regulator.

 

The proposed open offer for an additional 26% stake in USL entails purchase of about 3.8 crore shares at a price of Rs1,440 per share, totalling to Rs5,441 crore, by Relay BV, a wholly owned subsidiary of Diageo.

 

United Spirits, the country's largest spirits company, is part of Vijay Mallya-led UB Group, whose aviation venture Kingfisher Airlines is grappling with turbulent times.

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SEBI imposes Rs5 lakh penalty on Rotomac Global

SEBI found that Rotomac Global acquired 40 lakh shares representing 24% stake in FDIL from four entities in October 2009, but failed to make a public announcement

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs5 lakh on Rotomac Global for allegedly failing to make a public announcement regarding its stake buy in Flawless Diamonds India (FDIL), reports PTI.

 

SEBI had found that Rotomac Global had acquired 40 lakh shares representing 24% stake in FDIL from four entities on 30 and 31 October 2009, but failed to make a public announcement.

 

“...it is established beyond doubt that the noticee (Rotomac Global) acquired 40 lakh shares i.e. 24% shareholding/voting rights of the FDIL, from aforesaid four entities on  30 and 31 October 2009 and did not make the public announcement...” SEBI said in its order.

 

As per SEBI norms, no entity can acquire shares which entitle it to exercise 15% or more of the voting rights in a company, unless it makes a public announcement to the company within four working days of the transaction.

 

Rotomac Global had acquired the shares from Abhishek Jain, Jalak Jain, Manmohan Gems and Sethia Gems.

 

SEBI also found that the shares so acquired by Rotomac Global were transferred back to these four entities between December 2009 and March 2010.

 

The entity had informed the regulator that the purchase was made through a pledge agreement with the transferors and it did not acquire voting rights as the said shares were under pledge to it.

 

It said the shares were pledged for the purpose of providing margin towards its trading in option and futures market and, therefore, it is not liable to make any public announcement.

 

However, SEBI observed: “The pledgee cannot further transfer/sale the shares unless the pledge is invoked...in the present case, the mandatory procedure for pledge was not followed and apparently by virtue of being not a valid pledge, the shares were further transferred by the noticee to the same entities as is evident from the Demat statements.”

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