Sebi slaps Rs 25 lakh fine on 5 entities for non-disclosures

Market regulator Sebi has imposed a total penalty of Rs 25 lakh on five entities for alleged failure to disclose their shareholding in Murli Industries.

Securities and Exchange Board of India (Sebi) said five entities --  Ambaji Papers, Inco Infrastructures, Kanhaiya Mining and Minerals, Ramji Agri Business and Runicha Alloys and Steel -- were allotted 5 lakh shares each (amounting to 5.22 per cent stake) by Murli Industries, but failed to make requisite disclosures to the stock exchanges.

Accordingly, in an order dated September 30, Sebi has slapped "a penalty of Rs 5 lakh on Ambaji Papers, Rs 5 lakh on Inco Infrastructures, Rs 5 lakh on Kanhaiya Mining and Minerals, Rs 5 lakh on Ramji Agri Business and Rs 5 lakh on Runicha Alloys and Steel" for violation of Substantial Acquisition of Shares and Takeovers Regulations 2011".

As per the norms, any entity which acquires shares that is more than five per cent stake in a company is required to disclose at every stage the aggregate of its shareholding to that firm and the concerned bourses within a stipulated time.

Sebi found that the five entities were allotted 5 lakh warrants each by Murli Industries in December, 2006 which were then converted to equity shares. Consequently, the entities were allotted 5 lakh shares each (amounting to 5.22 per cent stake) by Murli Industries.

The market regulator noted that "the acquisition by each noticee was of large quantity of shares i.e 5,00,000 shares".

"Each of the noticees had individually acquired more than 5 per cent of the paid up capital of Murli Industries Ltd and taken together, they had acquired a substantial quantum of share capital," Sebi said.

"Hence, it would not be appropriate to consider this as a mere technical violation," it added.

The violations came to light while Sebi was investigating the alleged role by Sanjay Dangi and his associates in the manipulation of the price and volumes of shares of five firms including Murli Industries.