Markets regulator Sebi today imposed a fine of Rs 13 lakh on Tea Time Ltd for "enormous delay" in complying with the minimum 25 per cent public shareholding (MPS) norm requirements.
The Securities and Exchange Board of India (Sebi), in June 2010, had given a time period of three years (by June 3, 2013) to all the listed firms to maintain public shareholding of 25 per cent.
However, according to Sebi, Tea Time complied with the norms on September 9, 2015 when it completed the allotment of bonus shares to its public shareholders. There was a delay of more than 26 months in meeting the norms.
The firm argued that it was suspended and that there was no Company Secretary or Compliance Officer to look after its periodical stock exchange listing Compliances and also the methods initially prescribed by Sebi for increasing the public shareholding were not feasible.
"I cannot overlook the fact that the noticee took three years to come out with a bonus issue and comply with the MPS norms. Nothing stopped the noticee from complying with the MPS norms by issue of bonus issue while its scrip was under suspension of trading, this clearly shows that there was no intent to comply with the MPS norms," Sebi Adjudicating Officer Rachna Anand said in an order.
After taking into consideration the facts/circumstance of the case, the fact of enormous delay in complying with the MPS norm requirements, importance of such norms, the Adjudicating Officer said that a justifiable penalty needs to be imposed upon the Tea Time to meet the ends of justice.
Accordingly, a penalty of Rs 13 lakh was levied on Tea Time in terms of the provisions of the SCRA (Securities Contracts (Regulations) Act.
Earlier in November 2015, Sebi had lifted the restrictions it had imposed on Tea Time, its directors and promoters. The curbs were revoked after it complied with the MPS requirements.
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