9911796707
TMI Blog2015 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... is difficult to make such quantification. It is noticed that no effort has been made to even prove that any unfair advantage or disproportionate gain has come to appellant on a result of non-disclosure of acquisition of 5.36% stake in GEE by appellant. Similarly, no mention of any loss caused to an investor or group of investors as a result of default exists. Hence no cause for any harm to any investors due to non-disclosure has been made. In absence of such mention, it is seen that no such gain or advantage has occurred to appellants or any loss caused to an investor or a group of investors due to acquisition of 5.36% shares or voting rights by appellant in GEE. This is also to be seen from admission of appellant that acquisition of 5.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by Adjudicating Officer) Rules, 1995; the present appeal has been preferred by appellants before Securities Appellate Tribunal (SAT). 2. Facts of the case in brief are: respondents conducted investigation in trading of the company (appellant) for period April 28, 2000 and August 31, 2009 (Relevant Period) and issued show cause notice (SCN) to appellant, alleging acquisition of 5.36% of shares of the company without making requisite disclosures under Regulation 7(1) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ( Takeover Regulations for short) and Regulation 13(1) of SEBI (Prohibition of Insider Trading) Regulations, 1992 ( PIT for short) calling upon appellant to show cause as to why monetary penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and as part of amalgamation proceedings, it was under the impression that such acquisitions of shares do not attract requirement of disclosure as per law and hence did not made these disclosures. It was also represented that they did not willfully replied to SCN or appear before proceedings before SEBI, due to inadvertent failure of its employee to submit reply to SCN, after it was prepared and its non-appearance before adjudicating officer of SEBI in proceedings in this matter, was due to non-receipt of notices to this effect. 6. Learned counsel for respondent presenting case of respondent stated that appellant had purchased 50,000 shares of GEE from open market on November 12, 2008 and was thereafter allotted 50,000 bonus shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck brokers, but this also did not succeed. Subsequently, appellants informed SEBI, vide letter dated January 17, 2011 that they had not received any notice till date at correspondence address and sought time to file reply to SCN. 9. Similar hide and seek and asking for time for reply to SCN, carried in between appellant and respondent and during final hearing on April 11, 2012; appellant did not appear or filed any reply to SCN and hence it can be concluded that appellant did not cooperate with respondent and order against appellant was passed, ex-parte. 10. Issues for consideration are really not disputed since appellant has admitted charge of violation of relevant provisions of Rule 7(1) of Takeover Regulations, 1997 of not making r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f intimation of allotment of shares; or the acquisition of shares or voting rights, as the case may be. Upon considering the material made available on record and in the absence of any reply from the noticee establishing the contrary, it was concluded that appellant has failed to make disclosure regarding acquisition of 5.36% of shares capital of GEE to GEE as specified under Regulation 13(1) of the PIT Regulations. The text of Regulation 13(1) of the PIT Regulations is reproduced below: Disclosure of interest or holding in listed companies by certain persons- Initial Disclosure 13. (1) Any person who holds more than 5% shares or voting rights in any listed company shall disclose to the company in Form A, the number of shares or v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure to comply with Regulations 13(1) of PIT Regulations, has been imposed on appellant by Adjudicating Officer. 14. However, it is seen that no effort to quantify disproportionate form or unfair advantage, wherever quantifiable, made as result of default of disclosure under Regulation 7(1) of Takeover Regulations, 1997 or 13(1) of PIT Regulations, 1992 has been made; but it is admitted that it is difficult to make such quantification. It is noticed that no effort has been made to even prove that any unfair advantage or disproportionate gain has come to appellant on a result of non-disclosure of acquisition of 5.36% stake in GEE by appellant. 15. Similarly, no mention of any loss caused to an investor or group of investors as a result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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