Sebi imposes Rs 8 lakh fine on 11 entities

Capital markets regulator Sebi today slapped a fine of Rs 8 lakh on 11 entities for allegedly not making shareholding disclosures.
The Securities and Exchange Board of India (Sebi) in an order imposed "a penalty of Rs 8 lakh" on these entities.
They shall be jointly and severally liable to pay this penalty.
These entities, who were promoters of Dhruva Capital Services Ltd, had failed to comply with the provision Takeover Regulations by acquiring 49,000 shares (aggregating 1.50 per cent) by way of off-market mode on December 1, 2009.
After the share purchase, stake of the promoter group increased from 69.79 per cent to 71.30 per cent.

"...Acquisition made by Karnawat Hire Purchase Pvt Ltd along with the Person Acting in Concerts (PACs) was through off-market mode and not by way of open market purchase on the stock exchange...Noticees violated ...Takeover Regulations by not making a public announcement to acquire shares in accordance with the Takeover Regulations," Sebi noted.

The penalised entities are Karnawat Hire Purchase Pvt Ltd (acquirer) and Kailash Karnawat, Meena Karnawat, Nakul Builders & Developers, Laxman Singh Karnawat, View Estate, Vardhaman Fincon, Kailash Karnawat & Family HUF, Dungar Singh Karnawat, Pushpa Devi Karnawat and Dhruva Karnawat.
According to the norms, an acquirer together with PACs holding 55 per cent or more but less than 75 per cent of shares or voting rights in the target company may acquire additional upto 5 per cent voting rights without making a public announcement under the Takeover Regulations.

However, such acquisition should be through open market purchase in normal segment on the stock exchange instead of off-market transaction.