Sebi disposes case against Citigroup Global Markets Mauritius

Sebi had alleged Citigroup Global of purchasing 15.03 crore shares of Cairn India

Capital markets regulator Sebi has disposed of a case against Citigroup Global Markets Mauritius that alleged the foreign fund house did not make requisite disclosures regarding its share purchase in Cairn India Ltd.

In its show cause notice, Sebi had alleged Citigroup Global of purchasing 15.03 crore shares (amounting to 7.87% stake) of Cairn India which triggered the obligation for the foreign fund house to make disclosures to the concerned stock exchanges and the company.

However, in its order on June 24, Securities and Exchange Board of India (Sebi) said that allegations of violations of disclosure norms as specified in the show cause notice "do not stand and the matter is accordingly disposed of".

In its reply to the market regulator, Citigroup Global had denied acquiring 15.09 crore Cairn India shares on September 25, 2012.

The foreign fund house along with certain evidence to Sebi submitted that it had only acquired 3.9 crore shares (2.04% stake) of the company.

"From the material available on record it is apparent that the noticee had acquired 3,90,28,000 shares of the company (Cairn India) on September 25, 2012," Sebi said.

It observed that disclosure requirements "are triggered when there has been acquisition of shares or voting rights in a company which brings the aggregate holding of an acquirer to more than 5% or more shares or voting rights of that company".

The regulator said that the shares received by Citigroup Global Markets constituted only 2.04% stake in the company and hence were not in violation of any norm.

Sebi had conducted a probe into the dealings in shares of Cairn India from may 1, 2012 to October 31, 2012.

During the investigation, it was observed that Cairn UK Holdings had sold 15.26 crore shares of the company of which 15.03 crore shares were bought by Citigroup Global Markets.