Sebi imposes Rs 2 lakh fine on two individuals

Singhanias failed to make disclosures to IGPL in respect of their acquisition of four lakh shares

Market regulator Sebi today slapped a total fine of Rs 2 lakh on two individuals for failing to make disclosures regarding their acquisition of shares in erstwhile Indo Green Projects Ltd (IGPL).

The Securities and Exchange Board of India (Sebi) has "imposed a consolidated penalty of Rs 2 lakh on the noticees, namely Usha Singhania and Kamal Singhania...Noticees shall be jointly and severally liable to pay the said monetary penalty."

A Sebi investigation found that Singhanias failed to make the disclosures to IGPL (presently known as IITL Projects Ltd) in respect of their acquisition of four lakh shares, amounting to 7.92% stake, of the company.

Singhanias had acquired IGPL in the year 1998 as persons acting in concert (PAC) and were in the Board of Directors of IGPL when they consolidated their holding by acquiring these shares. Therefore, it was observed that they had made share acquisition as PAC.

"The noticees had acquired 4 lakh shares of IGPL constituting 7.92% of the share capital on March 31, 2002 as persons acting in concert (PAC), which increased their joint shareholding in IGPL from 21.28 lakh shares constituting 42.15% to 25.28 lakh shares constituting 50.07% without making any disclosure as required under the Takeover Regulations,"

As per Sebi norms, any entity who acquires shares of a company, is required to make disclosures of such acquisition along with aggregate of its pre and post acquisition of shareholding to the firm in case such acquisition aggregates to 5%.