Markets regulator Sebi has imposed a total penalty of Rs 21 lakh on KSS Ltd and three others for disclosure lapses.
The three persons are Sanjay Lal, Ashok Gangwani and Parag M Sanghavi, according to a Sebi order dated May 11.
Sebi had examined the alleged irregularities in the share trading of KSS - formerly known as K Sera Sera Ltd - between October 1, 2007 and March 31, 2010 during which Lal was the firm's managing director(MD), Gangwani was the director and Sanghavi was a promoter.
As per the shareholding pattern of the firm, the promoters' holdings reduced from 6.48 per cent for the quarter ended June 2008 to zero in September 2009.
In its order, Sebi said KSS made delayed disclosure of pledged shares of promoters to NSE and also made wrong disclosure of pledged shares of one of the promoters to the exchange in violation of SAST (Substantial Acquisition of Shares and Takeovers) Regulations.
The regulator also said KSS did not disseminate the details of pledged shares of the promoters to BSE and failed to file disclosures of invocation of shares of the promoters to both exchanges within seven working days despite receiving the same from the promoters.
According to the order, KSS had disclosed to the stock exchanges about proposal for allotment of convertible warrants to Bennett Coleman & Co Ltd and bidding for IPL teams, but it failed to disclose regarding non-implementation of these announcements as is required under the Listing Agreement.
As per the PIT (Prevention of Insider Trading) Regulations, the MD shall be responsible for ensuring that the company complies with continuous disclosure requirements.
"In the present case, company (KSS) had failed to disclose and MD (Sanjay Lal), being executive head of KSS, failed to ensure dissemination of the extant information to the stock exchanges," Sebi said.
Therefore, KSS and Lal have violated the SAST Regulations, Listing Agreement and PIT Regulations, Sebi said.
On November 6, 2007, Gangwani had sold 2 lakh shares of KSS following which he was required to make relevant disclosures to the company and the stock exchanges. However, according to the regulator, he failed to do so.
With regard to Sanghavi, Sebi said he delayed disclosures of pledged shares to KSS by seven working days and their invocation by four working days.
For the disclosure lapses, the regulator has levied a fine of Rs 50,000 each on Gangwani and Sanghavi.
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