SAT upholds Sebi order against 5 entities; slashes penalty

The Securities Appellate Tribunal (SAT) has upheld Sebi's order against five entities in a case related to failure of disclosing requisite details to the bourses but has reduced the penalty amount.
Last year, Sebi had slapped Rs 5 lakh each on -- Ambaji Papers, Inco Infrastructure, Kanhaiya Mining & Minerals, Ramji Agri Business and Runicha Alloys & Steel -- for failing to inform the stock exchanges about their acquisition of shares of Murli Industries that hiked their individual stake in the company to more than five per cent.
In an order today, SAT has reduced the penalty of Rs 5 lakh imposed on each one of these entities by Sebi to Rs one lakh each. The tribunal has asked the entities to remit the penalty amount within a period of two months.

"This tribunal has held time and again that the penalty levied on any wrong-doer ought to be commensurate with the gravity of the deviation effected," SAT said in the order.
"...The impugned order in each case is upheld with a modification of the penalty to Rs 1 lakh per appellant, to be paid within a period of two months from the date of receipt of copy of this order failing which the respondent would be at liberty to recover the same with interest by taking appropriate steps as per law," it added.
While observing that the underlying objective of making disclosures is to bring more transparency by way of providing complete information to the public, SAT said that in this matter "the public at large as well as the shareholders had due knowledge of the acquisition of number of shares by the appellants".

On September 30, 2013, Securities and Exchange Board of India (Sebi) had found that the five entities were allotted 5 lakh shares each (amounting to 5.22 per cent stake) by Murli Industries, but failed to inform the exchanges about the same.
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.