Case: Alpha Hi-Tech Fuel Limited Vs SEBI and Bombay Stock Exchange Ltd.. Securities and Exchange Board of India
| Judges | N.K. Sodhi, Presiding Officer and Samar Ray, Member |
| Issue | Company Law |
| Judgement Date | December 04, 2009 |
| Court | Securities and Exchange Board of India |
Order:
N.K. Sodhi, Presiding Officer
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Whether the appellant violated the provisions of Regulation 13(6) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (for short the Regulations) and whether the monetary penalty levied is excessive are the two questions that arise for our consideration in this appeal filed under Section 15T of the Securities and Exchange Board of India Act, 1992.
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M/s. Alpha Hi-Tech Fuel Limited (for short the company) is the appellant before us. It is a public limited company whose shares are listed, among others, on the Bombay Stock Exchange (BSE). It is feeling aggrieved by the order dated June 11, 2009 passed by the adjudicating officer holding it guilty of violating Regulation 13(6) of the Regulations and imposing a monetary penalty of Rs. 5 lakhs. The Securities and Exchange Board of India (hereinafter called the Board) carried out investigations in the trading in the shares of the company for the period from November 24, 2004 to February 9, 2005. Investigations revealed that Alpa Haren Shah who was then a promoter-director of the company sold 3,46,000 shares of the company through six off-market transactions. It also transpired that Bhanuben Jaisukhlal Shah another promoter of the company sold 4,50,000 shares through three off-market transactions on December 4, 2004 and December 6, 2004. Regulation 13 requires any person who holds more than 5 per cent shares or voting rights in any listed company to disclose to the company in Form C the number of shares or voting rights held and change in shareholding or voting rights even if such change results in shareholding falling below 5 per cent. It also requires a person who is a director or officer of a listed company to disclose to the company in Form D the total number of shares or voting rights held and change in shareholding or voting rights if there has been a change in such holdings from the last disclosure. The listed company is then required to disclose within 5 days to all stock exchanges on which it is listed, the information received from the shareholders / directors / officers of the company. The listed company is required to furnish this information in the respective formats specified in Schedule III to the Regulations. It is alleged that Alpa Haren Shah and Bhanuben Jaisukhlal Shah had disclosed the reduction in their shareholding to the company but the latter failed to disclose the same to the Bombay...
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