Sebi bans individual from market in Classic Diamonds case

Sebi today barred an individual from securities market for a year in a matter related to acquisition of shares in Classic Diamonds by promoters and promoter group entities without making public announcement for open offer.

"... Yogesh K Kaji be restrained from accessing the securities market and further prohibited from buying, selling or dealing in securities, either directly or indirectly or being associated with the securities market in any manner whatsoever, for a period of one year ...," Sebi said in an order.

Sebi said Kaji and other promoter group entities have filed their shareholding as belonging to the promoter group in the disclosures made to the stock exchanges.

Kaji had acquired shares of Classic Diamonds (India) Ltd along with other promoter group entities during the quarters of December 2005, December 2007, September 2008 and December 2009.

According to the regulator, Kaji was acting in concert with other promoters against whom an order dated September 22, 2017 has already been passed wherein it was found that they had failed to make any public announcement in terms of SAST (Substantial Acquisition of Shares and Takeovers) Regulations pursuant to their acquisition of shares.

In view of the contravention of the SAST Regulations and considering the fact that winding up proceedings against Classic Diamonds had commenced before the Bombay High Court, the promoter and promoter group entities of the firm were restrained from accessing the securities market for a period of one year, through the 2017 Sebi order.

However, Kaji filed an appeal before the Securities Appellate Tribunal challenging the 2017 Sebi order on the ground that it was passed without giving him an opportunity of hearing.

The fresh ruling of the Securities and Exchange Board of India (Sebi) has come after the tribunal had set aside the markets regulator's earlier order in respect of Kaji.

As per the new ruling, Kaji had submitted that his name was erroneously included in the category of promoters in the quarterly shareholding filings by Classic Diamonds.

Sebi said that Kaji was being continuously disclosed as a person belonging to the promoter group for a period of around four years and the information was available in public domain.

"If the disclosure was wrong or without his consent he (Kaji) could have taken appropriate steps for rectification before Sebi's enforcement action was initiated," the regulator said.

"Thus, it appears that the plea raised by the entity that he was erroneously disclosed as a promoter in the quarterly filings of the company is an afterthought," it added.