Appeal No. 63 of 2014. Case: Vijay Jain Vs Securities and Exchange Board of India. Securities and Exchange Board of India

Case NumberAppeal No. 63 of 2014
CounselFor Appellant: Joby Mathew and Deepak Awasthi, Advocates and For Respondents: Chirag Balsara and Mihir Mody, Advocates
JudgesJ.P. Devadhar, J. (Presiding Officer), Jog Singh and A.S. Lamba, Members
Judgement DateAugust 13, 2014
CourtSecurities and Exchange Board of India


Jog Singh, Member

  1. The present appeal has been preferred by five appellants, namely, Mr. Vijay Jain, Ms. Urvashi Jain, Ms. Sunita Jain, Ms. Shivani Jain and Vijay Jain (HUF) against the impugned order dated January 15, 2014 imposing a monetary penalty of ` 3 lac, to be paid by them, jointly and severally, for violation of Regulations 30(2) and 30(3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (for short 'SAST Regulations, 2011').

  2. Briefly stated the facts of the case are that while processing an open offer made by M/s. Vista Vyapaar Pvt. Ltd. (the Acquirer) and one Mr. Ankit Jain (Person Acting in Concert with the acquirer) to acquire 26% shares of the Gaylord Commercial Co. Ltd. (target company), SEBI noted violation of Regulations 30(2) and 30(3) of SAST Regulations, 2011 and, accordingly, issued a Show Cause Notice to the appellants under Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 on September 3, 2013. After holding an enquiry as per law, the learned Adjudicating Officer found the appellants guilty of the allegations levelled against them and imposed a penalty of ` 3 lac to be paid by them, jointly and severally.

  3. We have heard the learned counsel for the parties and perused the pleadings. The case of the appellants is that on September 21, 2012, a Share Purchase Agreement was entered into between acquirer and the promoters of the target company. Accordingly, an open offer was made by the acquirer and person acting in concert with him to acquire 26% shares of the target company. During this process, the Merchant Banker to the letter of offer noticed non-compliance with the Regulations 30(2)/30(3) of the SAST Regulations, 2011 and as per his advice the promoters of the target company i.e. these five appellants, therefore, made disclosures under the law on November 9, 2012 after a lapse of 147 days.

  4. We have perused the provisions of Regulations 30(2) and 30(3) of the SAST Regulations, 2011 which deal with "continual disclosures". Regulations 30(2) requires that 'the promoter of every target company shall together with persons acting in concert with him, disclose their aggregate shareholding and voting rights as of the thirty-first day of March, in such target company in such form as may be specified.' Similarly, Regulation 30(3) requires that 'the disclosures required under sub-regulation (1) and sub-regulation (2) shall...

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