Sebi imposes Rs 40 lakh fine on 4 entities in AVT case

Market regulator Sebi today slapped a cumulative fine of Rs 40 lakh on four entities for alleged violations of takeover regulations in the matter of AVT Natural Products.
Sebi, in its order, has imposed the penalty on Midland Rubber and Produce Company Ltd, Ajit Thomas, Shanthi Thomas and Neelamalai Agro Industries Ltd for violating provisions of Sebi (Substantial Acquisition of Shares and Takeovers) Regulations.
These entities had acquired 69.25 per cent stake in AVT by January 3, 2005 and subsequently had purchased 5,334 shares (0.14 per cent) between January 4-6, 2005 for a value of Rs 4.79 lakh.
"Since the noticees (four entities) acquired additional shares when they already held amongst themselves 69.25 per cent of the total paid up share capital, the statutory embargo to the effect that the acquirer must make a public announcement to acquire any additional shares in accordance with the regulation comes into operation which the noticees have failed to comply," Sebi said.

"They had bought 22,094 shares from December 12, 2004 to January 6, 2005 and the noticees had bought only 5,334 shares within three days of the amendment coming into effect / gazette notification," Sebi added.
Also, Sebi said that they made a notional profit on the acquisition of 5,334 shares in the range from Rs 32.14 lakh to Rs 32.67 lakh.

According to norms any acquirer, who has 55 per cent but less than 75 per cent of the shares or voting rights in a company, has to make a public announcement if they acquire any additional share or voting right in the company.

In a separate order, the regulator has levied a fine of Rs 2 lakh on erstwhile Upvan Securities Pvt Ltd for allegedly not making shareholding disclosures in the matter of Capman Financials Ltd.
Upvan Securities is currently Known as Altius Finserve Pvt. Ltd.