Appeal No. 337 of 2015. Case: Anarcon Resources Pvt. Ltd. and Ors. Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Appeal No. 337 of 2015 |
| Counsel | For Appellant: Ramesh Mishra, Practising Company Secretary and For Respondents: Kumar Desai and Manish Acharya, Advocates, i/b., The Vigil Juris |
| Judges | J.P. Devadhar, J. (Presiding Officer), Jog Singh and Dr. C.K.G. Nair, Members |
| Issue | Securities And Exchange Board Of India Act, 1992 - Section 15A(b) |
| Judgement Date | November 16, 2016 |
| Court | Securities and Exchange Board of India |
Order:
J.P. Devadhar, J. (Presiding Officer)
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Six appellants herein have filed the present appeal to challenge the adjudication order passed by the Adjudicating Officer ('A.O.' for short) of Securities and Exchange Board of India ('SEBI' for short) on 5th May, 2015. By the said order, firstly, penalty of Rs. 30 lac is imposed on the Appellant Nos. 1 to 6 under section 15A(b) of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short) for violating Regulation 7(1A) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ('SAST Regulations, 1997' for short) with a direction that the said penalty be paid by the Appellant Nos. 1 to 6 jointly and severally. Secondly, penalty of Rs. 5 lac is imposed on Appellant No. 6 under Section 15A(b) of the SEBI Act for violating Regulation 13(3) of the Securities and Exchange Board of India (Prohibitions of Insider Trading) Regulations, 1992 ('PIT Regulations' for short).
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As regards the penalty of Rs. 30 lac imposed on the Appellant Nos. 1 to 6 for violating Regulation 7(1A) of the SAST Regulations, 1997 counsel for the parties stated that the said issue is covered in favour of the appellants by the decision of this Tribunal in the case of Mr. Ravi Mohan & Ors. Vs. SEBI (Appeal No. 97 of 2014) decided on 16.12.2015 and Mr. Ratanlal Tamakhuwala & Ors. vs. SEBI (Appeal No. 249 of 2014) decided on 1.7.2016. Accordingly, for the reasons stated in the aforesaid two decisions, penalty of Rs. 30 lac imposed against the appellant cannot be sustained.
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As regards the penalty of Rs. 5 lac imposed against the Appellant No. 6 for violating Regulation 13(3) of the PIT Regulations it is not in dispute that Appellant No. 6 was holding 22.78% shares of Austral Coke and Projects Ltd. ('company' for short). Admittedly, the Appellant No. 6 had pledged the shares of the company with SICOM Ltd. ('SICOM' for short) and SICOM had invoked the pledge on 22.12.2009 and 1.2.2010. The shares transferred from the account of the appellant to the account of SICOM due to invocation of pledge exceeded more than 2% of the total shareholding of the company on both the days.
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Under Regulation 13(3) of the PIT Regulations any person who holds more than 5% shares or voting rights in any listed company shall disclose to the company any change in the shareholding exceeding 2% of the total shareholding or voting rights in the company. In the present case...
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