Securities Exchange Board of India (SEBI): Suresh B Menon, Adjudicating Officer, imposed a monetary penalty of Rs three lakh on Viaan Industries and its promoters under the provision of Section 15A(b) of the SEBI Act, for violating Regulations 7(2), 7 SEBI 7(2) (a) and 7 (2) (b) of the Prohibition of Insider Trading Regulations, 2015 (PIT).
In the pertinent matter, on October 29, 2015, Viaan Industries Limited (VIL) made a preferential allotment of 5,00,000 equity shares to four persons and in the said preferential allotment 1,28,800 shares each were allotted to Noticee no. 1 & 2 viz., Ripu Sudan Kundra and Shilpa Shetty Kundra, respectively. Both the noticees were required to make the necessary disclosure to the company in terms of the provisions of Regulation 7(2) (a) of the PIT Regulations, as the relevant transactions in question through the aforementioned preferential allotment exceeded Rupees 10 Lakh in value. And the Company was required to make the necessary disclosures to the stock exchange within two trading days of the receipt of the disclosures from Noticee no. 1 and 2 or from becoming aware of such information pertaining to the transactions. But during the course of investigation, it was observed that the Noticees allegedly failed to make the relevant disclosures required under Regulations 7 (2) (a) and 7 (2) (b) of the PIT Regulations within the stipulated time period. Thereafter, it was further observed that even when the disclosure was so made it was after a delay of more than 3 years.
The notices submitted that “the delay in making the necessary disclosures under the PIT (Prohibition of Insider Trading) Regulations was due to inadvertence and without any malafide intention.”
The adjudicating officer, while rejecting the submission, stated that, “the disclosure requirements mandated under the respective regulations serve very important purposes. The stock exchange is informed so that the investing public will come to know of the position enabling them to stick on with or exit from the company. Timely disclosures of the details of the shareholding of the persons acquiring substantial stake is of significant importance as such disclosures also enable the regulators to monitor such acquisitions. In the instant matter, the acquisition of shares by the promoters through the preferential allotment having value of more than Rs 10 Lakh is of relevance from an investors’ perspective”.
Therefore, considering the available records and facts and circumstances of the case at hand imposed a monetary penalty upon the Noticees under section 15 A (b) of the SEBI Act.[Viaan Industries Limited, In re, Order/SBM/KL/2021-22/12740-12742, decided on 28-07-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
