Sebi slaps Rs 21 lakh fine on 5 persons in Sungold Capital matter

Capital markets regulator Sebi on Monday imposed a total penalty of Rs 21 lakh on five individuals for not making public announcement about acquisition of shares in Sungold Capital.

Rajiv R Kotia, Shilpa Amit Kotia, Shweta Dhaval Kotia, Dhaval Ramesh Kotia and Ravi Rajiv Kotia are the five persons on whom the regulator has imposed the penalty.

Sebi had conducted an investigation in the scrip of Sungold Capital Ltd for the period of April 2007 to March 2008.

The watchdog during investigation found that Rajiv R Kotia's shareholding in Sungold Capital Ltdrose from 11.96per cent to 16.53 per cent on acquisitionof more than 2.8 lakh shares from promoters of the company between quarter ended June 2007 and quarter ended September 2007.

The acquisition of Rajiv R Kotia is from other promoters and thus is an inter-se transfer, not resulting in any change of control, the regulator noted.

However, an acquirer, within 21 days of the date of acquisition, is required to submit a report along with supporting documents to the board, giving all details in respect of acquisitions which would entitle such person to exercise 15 per cent or more of the voting rights in a company, Sebi said in an order.

An acquirer needs to disclose at every stage the aggregate of his shareholding or voting rights in the company to the board of the company and to the stock exchanges where shares of the target company are listed.

The regulator further said that Rajiv R Kotia has not refuted the allegation that he failed to make the necessary disclosures and submit a report to Sebi.

The acquisitions by Rajiv R Kotia were inter se promoter transfers and did not result in any change in control. However, he cannot claim exemption from requirement as he failed to comply with necessary disclosure requirements, according to the regulator.

Hence, Rajiv R Kotia was required to make a public announcement for acquisition of more than 15 per cent shares in Sungold Capital, but failed to do so, thereby violating the provisions of SAST (Substantial Acquisition of Shares and Takeovers Regulations).

Besides, Sebi found that Shilpa Amit Kotia, Shweta Dhaval Kotia, Dhaval Ramesh Kotia and Ravi Rajiv Kotia collectively acquired22.39 per cent shares in Sungold Capital without making an open offer.

By doing so, they violated the regulations of SAST (Substantial Acquisition of Shares and Takeovers Regulations).

Accordingly, Sebi imposed a penalty of Rs 11 lakhon Rajiv R Kotia, and a total penalty of Rs 10 lakh on Shilpa Amit Kotia, Shweta Dhaval Kotia, Dhaval Ramesh Kotia and Ravi Rajiv Kotia, which needs to be paid jointly or severally.