SAT stays ban on Samir Jain, wife, and six others in PNB Finance case

The Securities Appellate Tribunal (SAT) has stayed the ban imposed by the Securities and Exchange Board of India (Sebi) on Samir Jain, vice-chairman and managing director of Bennett, Coleman & Co (BCCL), his wife Meera Jain, and six others. BCCL owns news media organisations The Times of India, and The Economic Times.

Last month, the regulator had refrained Jain from accessing the securities market for allegedly violating minimum public shareholding (MPS) norms in PNB Finance and Industries (PNBFIL) and Camac Commercial Company (CCIL), which are listed on the Calcutta Stock Exchange.

Granting interim relief, the SAT noted that the directions issued by Sebi will have a direct impact on the functioning of the companies and its directors in their day-to-day functioning.

However, the SAT has directed the appellants to pay 25 per cent of the penalty within four weeks, and directed the couple to not accept any new post of directorship, or managerial position, in any limited company till the pendency of the matter.

In two separate orders, Sebi alleged that PNBFIL and CCIL did not make adequate disclosures about their promoter entities.

The market watchdog alleged that the entities misrepresented the company to be professionally run with no promoters, even as the Jain family was in direct control of management. It noted that through connected entities and crossholding in various corporate houses, the Jain family had 91.51 per cent holding in PNBFIL, and 94.45 per cent in CCIL.

According to MPS norms, a listed company must have at least 25 per cent public shareholding.

Sebi had imposed a penalty of Rs 12 crore on PNBFIL, while Rs 1.41 crore each was imposed on Jain and his wife. The tribunal has provided time till July 3 for filing a reply and rejoinder.