The Securities Appellate Tribunal today upheld Sebi imposing a total penalty of Rs 20 lakh on three firms and its seven directors for failing to make a public announcement of their acquisition of shares of Platinum Corporation Ltd (PCL).
In a common order,the Tribunal has upheld the fine on Vashi Construction and its two directors,Dhanlaxmi Lease Finance,along with its three directors and Rudra Securities and Capital and its three directors.
SAT observed that it did not find “any arbitrary or unreasonable approach adopted by the learned adjudicating
officer (of Sebi) towards any of the appellants or noticees”.
A Sebi probe found that seven allottees,including the three companies had acted in concert with each other for the purpose of acquiring a huge number of shares (2.90 crore) of
PCL through preferential allotment but failed to come out with
a public announcement to acquire the said shares as required
by the regulations.
As per the applicable Sebi regulations in this regard at that time,no entity can acquire shares or voting rights,which (taken together with shares or voting rights held by him or by persons acting in concert with him) entitle it to exercise 15 per cent or more voting rights in a company,unless such acquirer makes a public announcement to acquire shares of such a company.
Accordingly Sebi had initiated proceedings against 19 entities,including the three companies and its directors and on January 2012 imposed Rs 20 lakh penalty,which was to be paid by them “jointly and severally”.
The Tribunal has observed that the acts by the companies and its directors is “undoubtedly prejudicial to the healthy growth of the market and,therefore,Sebi rightly exercised
its jurisdiction in holding the proceedings against the appellants and in passing the impugned order in question that
too,after due application of mind”.
It added that all the three companies which acted through
their directors are equally responsible for the wrongful acts
in question and hence liable to pay the penalty.