Sebi slaps Rs 2 cr fine on two individuals

Markets regulator Sebi has imposed a penalty of Rs 2.07 crore on two promoters of Square Four Projects for repeated violation of takeover norms, including non-disclosure of share purchases.
Ganesh Kumar Singhania and Anita Singhania, the promoters of the firm, have been ordered to pay the amount "jointly and severally" for violations during the period from July 2009 to February 2010.
According to a Sebi order, lapses on the part of the promoters of Square Four Projects (India), earlier known as Essen Supplements India, also caused a loss of about Rs 65 lakh to the shareholders.
The two individuals had acquired 30,54,588 shares amounting to 53.14 per cent of the total paid up capital of the firm on July 24, 2009. Prior to the acquisition, they did not have any shares of the company.

However, the disclosure was made by them on July 27, 2009 with a delay of one day.
Sebi norms require a person acquiring shares beyond a certain limit to make disclosures within stipulated time.

"It is established that the noticees (Ganesh Kumar Singhania and Anita Singhania) have violated ... Takeover Regulations with respect to acquisition of 30,54,588 shares (53.14 per cent) on July 24, 2009 due to delayed compliance," Sebi said in an order yesterday.
In October 2009, the promoters had acquired 3,07,666 shares of Square Four Projects (India), leading to increase in their holding in the firm from 53.14 per cent to 58.49 per cent, they were under an obligation to disclose their shareholding within two days to the company and also to the stock exchanges.

However, Sebi noted that the promoters failed to make the disclosure with regard to the acquisition of 3,07,666 made during the period October 2009.
Ganesh Kumar Singhania and Anita Singhania had also violated Sebi norms by not making a public announcement following an off market acquisition of 22,730 shares of Square Four Projects (India) on February 18, 2010.
"It is observed that loss caused to the shareholders who had transferred their shares in off market (transaction) after February 18, 2010 and before the public announcement made by the noticee promoters on October 20, 2010 is approximately Rs 65 lakhs," said Sebi.