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TROPICAL SECURITIES & INVESTMENTS PVT LTD V/s SEBI [DEL]

Appeal No: 31 of 2013 Decided on: 02/04/2013 CASE IN BRIEF:

The Appellant acquired 13.59% of shareholding of PPL from a Clip Securities Pvt. Ltd (“Stock broker”) and 6.06% of shareholding of PPL from own account. As per provisions of Regulation-7 of SEBI Takeover Regulations, on acquiring shares or voting rights more than 5%, 10%, 14%, 54% and 74% the Acquirer has to disclose the same to the Company and Stock Exchanges within 2 days of acquisition. In this case, the acquirer has failed to make disclosure to the targeted company and Stock Exchange(s)(“SE”) and held punishable.

BRIEF FACTS:

In the present case, the Appellant has been alleged for not complying with the provisions of Regulation 7 of the Takeover Regulation and warrants imposition of penalty as per the provisions of the SEBI Act, 1992. The Appellant had acquired 7,00,000 shares of PPL from Clip Securities Pvt. Ltd. which is 13.59% of the total paid-up capital of PPL and also purchased 3,12,301 shares in quick succession from its own account which is 6.06% of the paid up capital of PPL. The total holding of the Appellant in PPL aggregates to 19.65% of the paid-up capital of PPL. According to Regulation 7, the applicant was needed to make proper disclosure to the Company & Stock Exchange within 2 days of such acquisition and derogation of such obligation has attracted penalty under Section 15A (b) of the SEBI Act, in consonance with the procedure established by the act, the applicant was also served with proper show cause notice (“SCN”) as to why inquiry should not be held and as to why penalty be not imposed. Failing on the part of the Appellant to answer the notice affirmatively, the adjudicating officer found the appellant guilty of the aforesaid violations and imposed a penalty of Rs. 2,50,000/- as stated above vide its order dated December 17, 2012.

DECISION: Appeal Dismissed. REASON:

Considering the facts and circumstances of the case and the evidence made available on record, it can be concluded that the Appellant has violated the provisions of Regulation 7 of SEBI Takeover Regulations. In view of the above, the present case warrants imposition of penalty as per Section 15A (b) of the SEBI Act, 1992.

In this background, the Tribunal does not find any legal infirmity in the impugned order dated December 17, 2012 passed by the learned adjudicating officer Shri D. Ravi Kumar, and the same is hereby upheld. However, keeping in view of the totality of facts and circumstances of the case on the business of broker since 2001 after suffering huge losses as claimed by it, the Tribunal is of the considered opinion that a penalty of Rs.1 lac would meet the ends of justice. With this modification, the impugned order dated December 17, 2012 is upheld and the appeal is dismissed with no order as to costs.

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