Sebi slaps Rs 1 lakh fine each on two entities

In two separate orders dated Sept 30, the regulator has imposed a penalty on Nahata and Gujarat Metallic for their non-compliance to Sebi

Market regulator Sebi has slapped a fine of Rs one lakh each on Gujarat Metallic Coal & Coke Ltd and one Komal Nahata for allegedly not making relevant disclosures regarding their shareholding in Arvind International.

In two separate orders dated September 30, the regulator has imposed a penalty of Rs one lakh each on Nahata and Gujarat Metallic (formerly known as Arvind Chemicals) for their non-compliance to Sebi (Substantial Acquisition of Shares & Takeover) Regulations 1997.

A Sebi probe had found that on September 13, 2010, Nahata had acquired 3.75 lakh shares of Arvind International Ltd (AIL) from Gujarat Metallic and on October 26, 2010 sold these scrips to Gujarat Metallic.

Besides, these two entities did not make the relevant disclosures on both occasions to AIL as well as the stock exchanges.

According to norms, an acquirer who buys more than five per cent shares in a company, in any manner whatsoever, is required to disclose at every stage the aggregate of his shareholding in that company to the company and to the stock exchanges within two days of the acquisition of shares.

The Sebi found that Nahata, on September 13, 2010, had received/ acquired 3.75 lakh shares of AIL constituting 5.35 per cent of the total shareholding of the company leading to an increase in her shareholding from nil to 5.35 per cent.

Further, on October 26, 2010, she had sold the same number of shares to the same entity, Gujarat Metallic, in off-market constituting 5.35% of the total share capital of AIL.

"...Noticee (Gujarat Metallic and Nahata) had not made any disclosures to AIL and to the stock exchanges of such receipt of shares/change in shareholding as required under regulations," Sebi said in a similar worded order.