SpiceJet's Ajay Singh pays Rs 2 lakh to settle case with Sebi

The carrier is accused of disclosure lapses in the acquisition of the equity shares

The Securities and Exchange Board of India (Sebi) has settled a case against SpiceJet promoter Ajay Singh in the matter related to the alleged disclosure lapses in the acquisition of the equity shares by paying around Rs 2 lakh.

On January 15, SpiceJet informed the BSE that Kalanithi Maran and his associates had decided to transfer the ownership and management control of the airline to Ajay Singh, former promoter and his associates.

Post this, Singh reportedly moved to the regulator to make a case for an exemption from an open offer.

Typically, an entity is supposed to make an open offer while acquiring management control or over a 25 per cent stake or voting rights in a listed firm. But regulator can grant an exemption under Section 10 of the (Substantial Acquisition of Shares and Takeovers) regulations in the interest of investors.

After considering airlines conditions at that point of time, Sebi had exempted the new promoters of the airlines from making the offer to minority shareholders after it had received nod from ministry of civil aviation.

The official acquisition of shares was done in the February 23, 2015. According to sources, the company had to file the disclosure to the stock exchanges within four days as per the takeover norms. But it had filed only on September 2, 2016.

"The proposed adjudication proceedings intimated vide notice of approved enforcement action dated June 21, 2016 for his failure to make disclosure under regulation 10(6) of the Sebi ('SAST Regulations') for the transaction dated February 23, 2015...," Sebi said in a settlement order on Monday.

"The High Powered Advisory Committee considered the settlement terms proposed by the applicant in its meeting dated February 27, 2017 and recommended the case for settlement upon payment of '2,02,500 by the applicant towards settlement terms for the aforementioned defaults, Sebi order reads.

"It was a rare exemption that has been granted by Sebi under the takeover regulation.It ill be interesting to see if regulator uses this discretion and grants in the cases may come up in future," said Vaneesa Agrawal, partner, Suvan Law Advisors.