Sebi imposes Rs 62 lakh fine on two entities

Sebi has slapped a fine of Rs 62 lakh on two erstwhile promoter entities of Pankaj Piyush Trade and Investments for violating various capital market norms.
The Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 7.5 lakh and Rs 4.5 lakh on Hitesh Bhutla and Sterlite Metal Rolling, respectively, for not complying with disclosure norms.
Besides, Sterlite Metal Rolling has been penalised another Rs 50 lakh for failing to make an open offer.
Bhutla had sold 12.50 per cent stake out of his shareholding of 13.13 per cent in the firm on April 2, 2005, while he was part of the promoter group.

As per Sebi SAST (Substantial Acquisition of Shares and Takeovers) Regulations, Bhutla was required to make the disclosure about the sale of shares of Pankaj Piyush Trade and Investments to the firm as well as the stock exchanges where the firm was listed, within two days.
However, the individual made no disclosure, thereby, violating Takeover Regulations.

Prior to the sale of shares by Bhutla, the shareholding of the promoter group stood at 21.24 per cent and fell to 8.74 per cent post the sale.
In an order passed on July 31, the regulator noted that Sterlite acquired 23,050 shares constituting 5.76 per cent of shares of the firm on April 2, 2005, through off-market purchase and became part of the promoter group.

Following the acquisition, Sterlite was required to make the disclosure about its shareholding to the company as well as the stock exchanges where the firm was listed, within two days.
"Sterlite has failed to make necessary disclosures under Takeover Regulations," Sebi said.
After acquisition of shares by Sterlite, the shareholding of the promoter and the promoter group of the company increased from 8.74 per cent to 14.50 per cent and Sterlite also held the highest percentage of shareholding amongst the entities belonging to the promoter and promoter group of the company.
The regulator noted that on the very same date that Sterlite acquired 23,050 shares of the company, four private corporate bodies, where two of the directors of Sterlite were also the directors, had each acquired 21.25 per cent shares of the firm.

"Sterlite directly/ indirectly had acquired almost the entire shareholding of the company on April 02, 2005 without making an open offer," Sebi added.