The Securities and Exchange Board of India (Sebi) on Thursday imposed a penalty of Rs 10 lakh on Tata Steel for delay in disclosures about its increased shareholding in a group firm, The Tin Plate Company of India Ltd.
Sebi in its adjudication order said that in September 2009, Tin Plate Company had annunced an issue of 4,31,90,851 equity shares on a rights basis to its existing shareholders, together with the issue of 1,79,96,188 fully convertible debentures in the ratio of 5 fully convertible debentures for every 8 equity shares.
The regulator found Tata Steel had subscribed to and was allotted 1,33,12,500 equity shares and 55,46,875 fully convertible debentures. It had also subscribed to and was allotted an additional 86,73,599 equity shares and 1,17,00,093 fully convertible debentures pursuant to its undertaking to apply for equity shares and fully convertible debentures. On October 12, 2009, Tin Plate Company allotted 2,19,86,099 equity shares to Tata Steel as part of its rights entitlement in terms of the rights issue. This increased the firm’s stake in Tin Plate from 30.82 per cent to 42.88 per cent.
Sebi said as per norms, while Tata Steel was required to make the disclosures in two working days, the firm did it belatedly only on July 2, 2012.