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Sebi slaps Rs 5 lakh fine on Karvy Financial Services for disclosure lapses

Karvy Financial Services was required to disclose creation of pledge to the company as well as the BSE in accordance with the market norms

Press Trust of India  |  New Delhi 

Sebi

Capital regulator on Monday imposed Rs 5 lakh fine on Karvy Financial Services Ltd for making requisite disclosures after a delay of nearly seven years.

found that three promoters of Regalia Realty in order to obtain a project loan for the company, created encumbrance on the shares held by them by way of a pledge in favour of Karvy Financial Services to secure repayment of the loan.

Karvy Financial Services was required to disclose creation of pledge to the company as well as the BSE in accordance with the market norms.

Thereafter, the pledge created over the shares of the promoters of the company was invoked by Karvy Financial Services and subsequently, shares of the firm amounting to 55.56 per cent of its total share capital were transferred in its favour.

"By virtue of the pledge being invoked, Noticee shareholding in Regalia Realty increased from 0 per cent to 55.56 per cent and the said disclosure under Regulation 29(1) of SAST Regulation and Regulation 13(1) of PIT Regulation was made on December 26, 2018 to company and stock exchange i.e. after a delay of 6 years and 11 months," said.

The regulator thus imposed the monetary penalty on Karvy Financial Services for violating Substantial Acquisition of Shares and Takeovers (SAST) norms and Prohibition of Insider Trading (PIT) regulations.

Besides, through two separate orders, Sebi levied a fine of Rs 2 lakh each on Divine Waters Pvt Ltd and Sonia Finvest Pvt Ltd for failing to make timely disclosures with respect to reduction in their shareholding in Secure Earth Technologies Ltd.

First Published: Mon, December 23 2019. 19:50 IST
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