Sebi slaps Rs 20 lakh fine on two firms

Market regulator has imposed penalties for violating provisions SAST

Market regulator Sebi has slapped a total fine of Rs 20 lakh on two entities, Luharuka Commotrade and Comfort Fincap, for allegedly violating provisions of securities law.

The Securities and Exchange Board of India (Sebi) in its two separate orders said that it has imposed penalty of Rs 10 lakh each on the two entities for violating provisions SAST (Substantial Acquisition of Shares and Takeovers) regulations.

According to Sebi, Luharuka Commotrade had acquired 36.68 lakh equity shares or 45.65% stake in Comfort Fincap through preferential allotment on March 14, 2011, which led to an increase in its' shareholding from nil to 45.65%.

As the acquisition was more than the threshold limit of 15% as prescribed under Sebi's norm, Luharuka Commotrade was required to make a public announcement within four working days of the transaction, which it failed to do. However, it made the announcement on February 27, 2013.

Regarding penalty on Comfort Fincap, Sebi said it has slapped fine on the company for allegedly failing to disclose yearly shareholding to the stock exchange within requisite time-frame.

"It is observed that the noticee (Comfort Fincap)had not complied with the provisions of...SAST Regulations, 1997 for the years 1998 to 2010," Sebi noted.