Market watchdog the Securities and Exchange Board of India (Sebi) today challenged in the Supreme Court the order of the appellate tribunal SAT that had set aside the fine it imposed on broking firm Trimuph International for allegedly violating the Takeover Code.
The Securities Appellate Tribunal (SAT) had this February quashed a Sebi order that imposed a fine of Rs 5 lakh on Trimuph International, allegedly associated with Ketan Parekh entities, for acquiring shares of Adani Exports.
The allegation against the broking firm was that it violated Regulation 7 of the Sebi Takeover Code which requires the acquirer to disclose its shareholding to stock exchanges if the acquisition exceeds 5 per cent of the paid-up capital.
Accepting the Sebi petition, a bench comprising chief justice S H Kapadia and justices K S Radhakrishnan and Swatanter Kumar directed the brokerage to file reply.
According to the Sebi, the Ketan Parekh group entities had violated Regulation 7 of the Takeover Code by not making their acquisitions public despite crossing the threshold limit of 5 per cent in Adani Exports. Triumph International, said the Sebi, was one of such firms which was holding shares of Adani Exports in four different accounts.
Following this, the Sebi imposed a fine of Rs 5 lakh on Trimuph, which it challenged in the SAT, on February 10, 2010, which held that Sebi could not say the brokerage was acting in concert with Ketan Parekh merely because it and another firm Triumph Securities, in which Parekh had 51 per cent stake, were having a joint overdraft facility with Global Trust Bank.
The SAT also had held that mere fact that Triumph International and Triumph Securities enjoyed a joint overdraft facility did not lead to the conclusion that they were acting in concert with Parekh entities to buy Adani shares, because such dealings at the most could indicate close business association but not enough for concluding that the shares they held in Adani Exports could be clubbed for making disclosure under the Takeover Code.
