Sebi slaps Rs 25 lakh fine on 44 entities

Market regulator Sebi today slapped a total fine of nearly Rs 25 lakh on erstwhile Essen Supplements India and its 43 former promoters for their alleged failure to make shareholding disclosures within the stipulated timeline.
The Securities and Exchange Board of India, in two separate orders, has imposed a penalty of Rs 5.5 lakh on Essen Supplements India (now known as Square Four Projects India Ltd) and Rs 8 lakh on 43 entities including Natwarlal L Kanani and Mayur N Kanani.
These 43 entities "shall be jointly and severally liable to pay the said monetary penalty."
Further, the regulator levied Rs 3 lakh fine each on Kananis and a cumulative penalty of Rs 5 lakh on two individuals for violating Takeover Regulations.

According to Sebi, the company failed to make the relevant disclosures under Takeover Regulations for the financial years ending March 31, 1998 to March 31, 2008 within the stipulated time, i.E. On 11 occasions.
It also said that 43 entities (erstwhile promoters of Square Four Projects India) had not disclosed to the company and to the stock exchanges their acquisitions/ reclassification of shares of the company done in March 2004, as required under the Takeover Regulations.

During March 2004, shareholding of promoter group rose from 18.50 per cent to 28.11 per cent due to reclassification of the shares.
"Therefore, since the change in aggregate shareholding of the promoter group, due to such re-classification, being more than two per cent, the 43 entities who were admittedly a part of the promoter group, were required to disclose the change in the shareholding to the company and to the exchange within two days from the date of acquisitions/ reclassification," Sebi said.

Besides, Sebi said it has imposed the cumulative penalty of Rs 5 lakh on Kananis for not making disclosures for joint acquisition made by them in 2007.
Further, the regulator levied a fine of Rs 3 lakh each on Kananis for the individual acquisition made by them in 2007."
Kananis were "required to disclose the change in their shareholding to the company and exchange within two days from the date of acquisition as required under... Takeover Regulations due to the acquisitions made by them in 2007.